Compulsory Consumer Finance Education Discussion

edited 24 November 2009 at 11:14PM in Student Money Saving
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  • heleenheleen Forumite
    116 Posts
    My son (now 5) had only ever watched CBeebies, which does not have ads.
    Now he watches Cartoon Network and doesnt' understand ads. I have explained to him that people put these annoying little films between the programme you want to see because they are trying to sell you something. They pay a lot of money to be able to put the little films in there because they think you and I are easily swayed and will rush out and buy things. But we know better, right?
    And while the little films are annoying, the money they pay for them allows the channels to show you cool things like Ben 10 which they could otherwise not afford.
    I love it when a plan comes together :rotfl:
  • jazmad wrote: »
    Most of the posts (including Martin's) are very cynical.

    Yes, businesses are out there to make money and not help you out but these classes shouldn't be about raging against the capitalist machine. Much more important is giving children a basic understanding of everyday finance such as:
    - different ways to save and the pros/cons (savings account, investment, ISA etc)
    - different ways to spend and the pros/cons (cash, credit/debit card, debt)
    - tax system
    - benefits system
    - how to do a budget and the importance of forward planning (in my mind, this is the most important point)
    - monitoring your money

    Later classes could consider how the shops try to persuade you to spend and ways to shop around, haggle and work the system for your advantage but there's no point covering this if kids don't understand the basics. The main way companies are able to exploit people into making inappropriate choices is due to consumer ignorance. Educate people, and this will become harder.

    This would also hopefully help kids understand the importance of being numerate and confident with figures instead of seeing Maths as an abstract irrelevance (a personal pet peeve).

    Agree with this post entirely, why not incorporate it into IT classes, it'd be much more interesting/meaningful to show them a household budget as an intro to spreadsheets wouldn't it? Unless you're really fortunate you'll never be in a position where you'll never have to go into debt, so teach the 'not all debt is bad' lesson early on and how to plan/manage your finances when you do.
  • Great timing, I had just been speaking to someone saying that this needed to be done, when the email arrived!

    As someone who walked into a bank at 18 and got a current account loan and credit card thrown at them with no real knowledge of the potential consequences, I think a financial education is hugely important.

    Although I can only blame myself for the situation that I got myself in, if I had any idea about the trouble I would cause myself and the fact that it took me years to get out of (and am still feeling the after effects now that I am looking to buy a house) I probably wouldn't have signed those contracts.
  • Once I finally got to grips with looking after my money the things i think everyone should be taught are: ALWAYS know exactly how much money you have (check the balance every day or so); always know the total of all direct debits and standing orders that you pay each month - this avoids getting unpleasant surprises; listen to your granny - if you haven't got the money you can't buy it! - borrow only to buy a house, save for everything else; use a credit card as rarely as possible and pay it off online in full before the statement has even been printed.
  • I have two young children, thee oldest is almost 4. I am already talking to her about money, she puts any money she is given into her piggy bank and anything she wants to buy she pays for (obviously we are not mean about this, and give her the odd 'coin' if she is short) or wait for a birthday / christmas. She knows that if Daddy did not go to work we would not be ale to live in our house and be warm. She is already understanding a little of the value of money, and that our pockets are not bottomless. The problem of being part of a consumer society is that kids are growing up expecting everything instantly, they think that they have a right to the stuff they want. They don't. They have the right to a roof over their heads, food on the table and something to wear, of and of course love! I think at primary age our children should be taught from a positive angle that money doesn't grow on trees and that working for it will bring about a sense of achievement and well being. Work is viewed as a negative thing by many kids these days, rather than a fulfilling thing. When she gets older, my daughter will get pocket money but she will be expected to do certain things to help around the house in order to earn it. This is not child labour, its a lesson in the value of money and work.
    At secondary level, I believe that children should be encouraged, again, to see work as a chance to earn their own money. They should be taught how to manage money and definately taught the values of saving. As a kid I was always told to save but never taught how or why - this had a detrimental effect in my early adult years when I viewed personal loans and overdrafts as easy money. It took several years to recover - I would like to think that my children will not have to learn the hard way, my aim is to educate them at home, my hope is that this will be backed up in school.
  • I would suggest making sure they know the best pay as you go deals as they rely on phones so much. I would also encourage them to save more of their pocket money for their gap year or towards their first car. I used to earn pocket money by doing jobs to help my parents around the house each week. It helps to realise the value of money and that it takes effort to earn it rather than always expecting to be given it. Children might not be as quick to spend it then.
    stay lucky!
    Steve.
  • I'm actually quite good at teaching my children about money and finance. The point I'd like to make, though, is that I'm fed up with endless adverts on TV that try to undermine what I'm telling the kids. Adverts for financial services DO NOT belong on children's channels, nor should they be shown during children's programmes. Adverts for unhealthy food aren't allowed under these circumstances, why do we still allow children to think that loan companies are the answer to all our financial woes?

    Thank you for listening, I shall stop ranting now!
  • I would like children to be taught the concept of value for money in the context of general consumer education
    1. The sort of sums proposed by Tracy above (how long you have to work to earn a pair of trainers), but in great detail, to analyse how much work / what proportion of your weekly income would be required to buy a range of goods and services
    2. Different methods of purchasing and the associated costs and charges or discounts eg internet vs shop, booking fees, card surcharges, direct debit, monthly payments
    3. Comparisons between different levels of goods and services eg bus and taxi, takeaways, ready meals and meals from scratch, comparisons between style, quality and durability of different types of clothing ranges (designer, quality, cheap) and food (eg free range chicken vs cheap non-EU factory farmed chicken).
    4. I would also talk about wages and conditions for the people who are working to produce the food, clothes, (eg designer and budget clothes may both be make by very low wage workers, but the producers of designer clothes are making a massive profit)

    In short, I would like them equipped to make informed decisions about how they spend their money, taking all factors into account.

    My son (now age 20) and his friends take the view that if you want something (takeaway, taxi home, designer top) and you have the money, you buy it, and if that means that you have no more money for the next week, that's fine. They would pay a £5 charge to cash a £30 cheque so they could spend it straightaway rather than waiting for it to clear through his bank account. This attitude applies even when they are working hard to earn their money at minimum wage levels.
  • Following the wonderful example given by tracey2412, another useful lesson would be the following: If an item is in the sale for £30 - reduced from £100 - then that is £30 you are spending. You are NOT saving £70, so unless you particularly NEED that item, then it is not a good deal for you!

    Which brings me to perhaps the best two general guides regarding money and they are:

    1) Always spend money on the things that you NEED first, then - and only then - if there is any left over you spend it on the things that you WANT.

    2) Earning money may bring you happiness. Earning vast amounts of money may not necessarily make you feel vastly happier.
  • I'm reminded of those "scam" warning emails that do the rounds. They are 99.999% of the time hoaxes. But it's the motivation of people who pass them on. You can't, in my mind, learn every single scam in the book. You have to learn general skills in awareness and reason to avoid scams, because for every scam you learn, there are 1000 different ways dishonest people (in conjunction with your own stupidity) can catch you out. Even if these scare stories are true, they are unlikely to help as fraudsters have probably moved on to a new trick by now, general life skils not awareness of specifics are in order.

    I think the whole financial awareness thing is just an application of the sort of skills you learn in science, english and maths.

    Science teaches you to view the world systematically and through that teaches reasoning skills, English teaches literacy and the ability to take in information and understand it, maths, well basic numeracy.

    You know the addage of "give a man a fish... teach a man to fish".

    I think getting the basics of literacy, numeracy and reasoning are "teach a man to fish" whereas teaching financial tips.
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