Money management in schools...

curly04

I remember my very first loan - Only needed £1000.00 but the bank told me a £2000 was cheaper...... they didn't tell me that they mean the APR

3 Days later they were on the phone offering me a credit card - they said I needed this to be protected when I was shopping.

Sounds daft - I knew nothing about money and I thought they were trying to help me.

And as for the reset button - I wish it would reset and the arguements and tears, sleepless nights, time in hospital, being pushed over in my own house by the provident man, being s**tscared to go home

Yea BR is so easy!!!

MicheH

neas wrote: »

While i think teaching kids the value of money is a good idea.. i don't think the majority of people can 'blame' someone for not telling them that if they borrow money.... they need to pay it back and if they borrow too much they might stuggle... or find it impossible to pay back.

Isn't it a simple rule of life? Nothing is free? Companies will try and screw you for every penny... so when you get that lovely store card letting you buy 500 pounds of xmas pressies there and then.... obviously they are taking you for a rise.. unless you have the cash to pay it off.

Are we saying that our children are not intelligent enough to realise a simple concept of borrowing?

I think its more down to ' worry about it tomorrow'... than understanding borrowing money. Borrowing money.. is shifting your wealth from the future.. into the present.... thats all. Of course when you go bankrupt you get a 'reset' button which is nice... but nobody starts borrowing aiming to go bankrupt...

Absolutely, I agree with the 'have it now, worry about it tomorrow attitude' That is the era I have grown up in, there's no two ways about it - we grew up thinking it was ok to have things on tick, every body does, every body pays for as they're gong along attitude.

What is wrong is a 17 year old nearly out of college being approached by companies via mail to her home being offered 1000's of pounds. I am not stupid, I knew I couldn't afford a loan while I was still at college but when I started working at 18, I could afford everything I was taking on and then some, I didn't think I had debt, I thought I was living just like everybody else, getting the good things and paying chunks off every month.. that's how you live right? Wrong, and youngsters need to see that (please go ahead and tell me I was very blindsighted, that I was alone in thinking this way in my late teens and i'll tell you to not be so stupid and you're the blindsighted one, it was happening then, it was rife then)

Youngsters need to be aware that circumstances change rapidly. When you get together with the same sort of person with the same sort of attitude to money and life well then it's a disaster, you're both joining together saddling a lot of money through cars, credit cards, consolodation loans. When you're single you can cope.. both of you but when you try to move on in life (live together, have children, try to put money into a pension, paying for childcare etc) you very quickly relise that you're in debt, you're in this very horrid trap that you cannot get out of.

Of course you borrow, you pay back. Of course I realised this. I never had any intention of not paying it back but that attitude is way off it's not even relevant. You see what we need to be telling youngsters and making them aware of is, it's never baout how much you borrow, it's about the interest. Over the past 12 years DH and I have paid off the origianl amount.. it's true, what we borrowed they have had it back! What we're left with is thousands and thousands of pounds of interest added that's mounted over the years making sure we have never paid anything off the amounts in the eyes of the creditors. THAT is the message we need to be putting to our youngsters. The message of TRAP. The message of BEING USED TO MAKE MONEY OUT OF. The message of READ THE SMALL PRINT. The message of FUTURE PLANNING. THe understanding of good and bad debt, the understanding of interest rates, the understanding of credit scoring, the understanding of how the banking system works.

That is what money management needs to be about in my view and a bank cannot get this message across, nor would they want to - it defeats the purpose.

In_a_Mess_3

Fantastic post MicheH, I agree with it all.

dojoman

In_a_Mess wrote: »

Fantastic post MicheH, I agree with it all.

Totally agree,

alastairq

Absolutely, I agree with the 'have it now, worry about it tomorrow attitude' That is the era I have grown up in, there's no two ways about it - we grew up thinking it was ok to have things on tick, every body does, every body pays for as they're gong along attitude.

this is absolutely what the likes of Maggie Thatcher, and all those following on, went to great lengths to encourage.

It's called the 'feelgood' factor.

People who started getting a decent income, were /are openly encouraged, from all quarters, to 'have it now'....and whilst the income is there, people had no reason to doubt that they could have it now!

Tie that in with the peculiarly British idea of property ownership....and the massive rises in property values, and the concept of feelgood rises ever higher.
[the fact that property ownership also serves to divide the country's workforce, so powerful in the '60's and '70's...and make each individual so much more vulnerable to pressure....gets ignored]

Look at the notion of buying a new car?

One walks into the showroom, to be bombarded with sales patter....

the reality is, the dealer isn't selling cars, they're selling finance deals..the car is almost a freebie thrown in with the deal.


Very few buyers walk in with a wad of cash for a new car....and probably wouldn't get the discounted deal a finance purchaser would be offered...since cash isn't an earner for a car dealer.

Whilst we all can claim to be resistant to sales patter.....the whole concept of salesmanship, advertising, public relations, etc, is designed to overcome any resistance presented by a potential customer.....and must work, otherwise it would not be the multi-billion dollar industry it is?

I think much of the problem of debt arose once the finance industry had saturated the middle and upper income brackets...where little or no new business could be squeezed.....so they turned to the lower income bracket for new business...and when that was pretty soaked, then they look at the sub-prime market.....

People like us are treated in much the same way as punters treat the horses....

even when we fail , the finance industry doesn't really lose, as it hedges its bets.....DCA's are simply the lower end of the food chain.

so yes, we can blame ourselves for the situations we find ourselves in.....to a point...but we mustn't be too hard on ourselves, especially when we consider the pressures we have all been placed under...for years.[so much so, I think it's endemic in our society......failure...success...compliance...??}

yet, every BR in truth has turned failure into success.


Success in teh fact that, by pursuing a certain course of legal action, debts have been quashed.

this is no more lacking in moral virtue than the antics of the banks and big companies...who all the time are seeking to reduce/eliminate debt, competition, etc....by all sorts of devious and far more morally disgusting methods.

Having read through these posts, the more I am convinced the Finance industry is cynically ticking PR boxes in schools......what really is needed is for a degree of economics to beintroduced, taught by qualified, independant teachers...with no axe to grind other than to forewarn children of the real financial dangers that lurk out there, all dressed up in sugary coatings.

MicheH

alastairq wrote: »

convinced the Finance industry is cynically ticking PR boxes in schools......what really is needed is for a degree of economics to beintroduced, taught by qualified, independant teachers...with no axe to grind other than to forewarn children of the real financial dangers that lurk out there, all dressed up in sugary coatings.

An excellent post Alastair.

neas

I was brought up by parents who were credit averse (they dony have a credit card)... but i have a few credit cards... but always pay off at end of month.. so i win in a way (points, prizes, cashback etc)

It is a good idea to teach people what borrowing means... but im not sure it would stop an immature 17-18 year old (or even some 20-25 year old :P) spending it on the latest 'must have' gadgets. My wife and I only just got a flat screen.. and our couch is 30 quid 2nd hand friend jobby.... we scrimp and save.

It gets my goat a little bit thats all. Sure teaching people about borrowing and how to budget is a good idea... but our society (not just banks) encourages people to get all the expensive tat they don't really.. really need.

For example... how many of you have tumble dryers, automated washing machines, huge fridge freezers, flat screen tvs (32 " and above).. how many of you bought new cars on finance or cars on finance in general?,... could you have downsized to a cheaper more affordable car?

IM sure a all of us are guilty for indulging our 'desires' sometimes.. but credit just encourages people to indulge... too much.

Keeping up with the Joneses or something is the saying... And Im sure being bankrupt isnt a 'reset'... but its close... if there was no bankruptcy clause would you appreciate having half your income taken away for 20 years? or 5 years of struggle then release?

All im saying is... yes banks are out to take your money, and take advantage of you... thatshow they make money.... you got to take responsibility and not blame it all on being uneducated in money matters. For example this site allows you to learn sooo sooo much on your own.... this isnt education its self learning. Give people the option of credit and debt and they will use it to get what they want today... for people (especially youngsters) want it now... not later.

MicheH

neas wrote: »

I was brought up by parents who were credit averse (they dony have a credit card)... but i have a few credit cards... but always pay off at end of month.. so i win in a way (points, prizes, cashback etc)

It is a good idea to teach people what borrowing means... but im not sure it would stop an immature 17-18 year old (or even some 20-25 year old :P) spending it on the latest 'must have' gadgets. My wife and I only just got a flat screen.. and our couch is 30 quid 2nd hand friend jobby.... we scrimp and save.

It gets my goat a little bit thats all. Sure teaching people about borrowing and how to budget is a good idea... but our society (not just banks) encourages people to get all the expensive tat they don't really.. really need.

For example... how many of you have tumble dryers, automated washing machines, huge fridge freezers, flat screen tvs (32 " and above).. how many of you bought new cars on finance or cars on finance in general?,... could you have downsized to a cheaper more affordable car?

IM sure a all of us are guilty for indulging our 'desires' sometimes.. but credit just encourages people to indulge... too much.

Keeping up with the Joneses or something is the saying... And Im sure being bankrupt isnt a 'reset'... but its close... if there was no bankruptcy clause would you appreciate having half your income taken away for 20 years? or 5 years of struggle then release?

All im saying is... yes banks are out to take your money, and take advantage of you... thatshow they make money.... you got to take responsibility and not blame it all on being uneducated in money matters. For example this site allows you to learn sooo sooo much on your own.... this isnt education its self learning. Give people the option of credit and debt and they will use it to get what they want today... for people (especially youngsters) want it now... not later.

Do I tetect a bit of a dig at bankrupts there? This is a conversation about money matters in schools. Bankrupts do take responsibility for what we have to do.. more than you could ever, ever know. You have said it yourself, you had parents to teach you to be credit aware. That is all we are saying.. have our youngsters know about the trappings of debt. My brother in law is the same age as me, brought up brilliantly about debt - he won't even pay his utilities by direct debit or have it collect in an account because it sticks in his troat them making money out of his interest - IT IS ALL ABOUT EDUCATION IN THE YOUNG! You and my brother in law are testment to that.

As a 17, 18, 19 year old kids are bombarded with offers, if they havn't the education about what can happen to them 5, 10, 20 years down the line should their circumstances alter then they cannot stop this get it now culture. If more kids thought like my brother in law and actually saved for their wants well there is a culture of kids growing into adults we could all applaud.. sadly, it is down to self education as you say because no government or banking insitution are going to allow this kind of teaching in schools.

I also think you should really choose your judgemental words more carefully "how many of you have tumble dryers, automated washing machines, huge fridge freezers, flat screen tvs (32 " and above).. how many of you bought new cars on finance or cars on finance in general?,... could you have downsized to a cheaper more affordable car?"

Bankrupt are not all jones' keep uppers. Many are BR because they marriage fell apart, couldn't afford mortgage repayments, gave up for reposession and left with 10's of thousands of shortfall debt or another example worked hard all life then while out working had a nasty car accident, left with crippling disability and could not continue with job, infact could not work at all or how about... no, I won't continue. I think you get the picture.

I feel the comments I highlighted in bold were not called for, very judgemental and had nothing to do with money management in shools.

~daisy~_2

a pet hate but im replying without reading the entire thread ....

my daughter has just gone up to upper school and is sitting a ''money management'' exam in march under exam conditions and will - if she passes - receive a certificate and will be able to add it to her CV

So_Sad_Angel

~daisy~ wrote: »

a pet hate but im replying without reading the entire thread ....

my daughter has just gone up to upper school and is sitting a ''money management'' exam in march under exam conditions and will - if she passes - receive a certificate and will be able to add it to her CV

Thats encouraging to hear daisy....I know my kids did`nt get that kind of financial education & I think its such an important life skill.

It would not only help avoid unnecessary pitfalls/debt problems but also to encourage & teach how to make money work better & more effectively in terms of future personal wealth.

I wish her luck in the exam.

Angiexx