MSE News: Young people have 'dangerous gaps' in money knowledge, charity says

rinabean

ermine wrote: »

Do these young people not have parents, were they raised by wolves? This is not a job for schools, it is a job for parents, to pass on their values and wisdom. It's nto that difficult, is it. If your bank statement has DR then STOP SPENDING. NOW.
Stop spending on wants until the statements say CR. An introduction to Wilkins Micawber from Charles Dickens would be a good place to start...

Why do you think we have schools? I could teach a child everything I learnt at school and lots more, couldn't you? Does that make it not a job for schools any more? The report clearly says that these young people aren't learning these things. If they don't know it by 25, they've a good chance of not being able to pass it on to their own children... which is probably why they don't know in the first place.

Your advice is simplistic and a good example of why kids could benefit from trained teaching as well as whatever they might be learning at home.

ermine

Why do you think we have schools?

We have schools to teach children the detailed stuff parents don't necessarily know. In an ideal world we would expect a basic level of general education but not necessarily more than the three Rs. I hear that kids are reaching schools not toilet trained so the quality of parenting has clearly fallen in the decades since I went to school.

There's nothing simplistic about my observation. Human children have two parents specifically to pass on social and life skills during the unusually long dependent period of the species, as well as transmitting a basic set of values and ethics to enable them to rub along with their fellow human beings in the complex societies this species constructs.

If we are starting to have parents who fail to pass along some of the basics then we need to collectively stop encouraging these people to become parents, and intervene correctly and quickly when it becomes apparent they are unfit for the job. My local council does this through temporary fostering. It used to be done by taking the children of incapable parents into care.

Education is a partnership between society and the parents. Essential social fundamentals which include the very basics of personal finance are the job of the parents. If everything has to be taught at school as you are advocating, because the only job of the parents is the moment of passion, then in the long run I guess the State is going to have to do the whole job and take care of children from the moment of birth, eh?

John_Pierpoint

"It takes a village to raise a child".

kboss2010

As a country the Government should care that we, as a population, manage our money well so that they don't end up footing the bill when people haveto declare themselves bankrupt and need state hand-outs when they lose their houses.

BUT, it is not in the banks' best interests to educate everyone to a high level on finances because, as Martin Lewis has said on many occasions, the more you know the more likely you are to avoid charges. This means that the more people avoid charges, the less financial institutions will make in profits. Bad for shareholders and bad for business.

Some banks offer financial education lessons to school kids but they're a token gesture and don't tell you anything about charges or how to avoid them really, they just tell you what a budget is.


I don't believe that we will ever get decent financial education in schools because it isn't in the best interests of making profit for the banks.

tvtalkshowshigh

We may not have learnt the ins and outs of tax legislation, hedge funds and financial derivatives, but we definitely learnt how to calculate compound interest at the state comprehensive school I went to.

Anyway, much more troubling to me is the bad application of statistics in that article. The first line sets alarm bells ringing: "Two-fifths (42%) of 14 to 25-year-olds were unable to ..."
How can it be right to lump 14 to 25-year-olds all into one group? The idea of 14 to 17-year-olds not knowing what an overdraft is doesn't really bother me too much since they can't get one! Of course it'd be nice if they did know, but it's not a disaster. If 13% of 18 to 25-year-olds didn't know what an overdraft was I'd be much more worried, but I very much doubt that what this survey showed.

Come to think of it, I didn't know what an overdraft was until I got one when I was about 20. It's not a difficult concept to get your head around, and only takes about 30 seconds to explain.

Also, which banks are still putting "CR" on their statements to denote an account is in credit? Mine put a minus sign next to the total when the account is overdrawn and not when it's not.

I'm certainly not against financial education for school kids, but I wish people wouldn't get carried away with surveys commissioned by people with an agenda.

securityguy

tvtalkshowshigh wrote: »

We may not have learnt the ins and outs of tax legislation, hedge funds and financial derivatives, but we definitely learnt how to calculate compound interest at the state comprehensive school I went to..

A great deal easier than calculating the repayments on a loan, however. And usually only on a single deposit. Calculating the value at the end of five years of a monthly saving plan, for example (which for most people is a much more realistic scenario) is substantially more complex.

tvtalkshowshigh

securityguy wrote: »

A great deal easier than calculating the repayments on a loan, however. And usually only on a single deposit. Calculating the value at the end of five years of a monthly saving plan, for example (which for most people is a much more realistic scenario) is substantially more complex.

That's a good point. In fact, it sounds like an excellent example of how algebra is useful in every day life. Just being able to spot that something isn't as simple as it first appears is useful, even if you don't know how to actually work it out yourself. So the conclusion ought to be that we need to teach maths better, not necessarily that we should squeeze specific 'financial education' into an already quite full curriculum.

DUKE

About time too! Some parents don't understand finances themselves, so how can they teach their kids?

John_Pierpoint

tvtalkshowshigh wrote: »

That's a good point. In fact, it sounds like an excellent example of how algebra is useful in every day life. Just being able to spot that something isn't as simple as it first appears is useful, even if you don't know how to actually work it out yourself. So the conclusion ought to be that we need to teach maths better, not necessarily that we should squeeze specific 'financial education' into an already quite full curriculum.

It is so important to teach maths with understanding as the goal, not just how to do the tricks.

That said, lessons about the financial facts of living, plus simple economics, need to be taught with a practical street wise approach.
For example The rule of 72:
An early reference to the rule is in the Summa de Arithmetica (Venice, 1494. Fol. 181, n. 44) of Luca Pacioli (1445–1514).
http://en.wikipedia.org/wiki/Rule_of_72

I am concerned at the number or parents who seem reluctant to let their children "grow up" with the result that they receive information about things that interest them, from inappropriate sources.