Financial Education

Eldi_Dos

But if it was part of the apprenticeship or course it would be in their interest to take on board and would be at a time of their life when they would be taking responsibility for their own finances and be open to new ideas. I see plenty of posts on here about teachers,university,lg and cs pension schemes. There is a wealth of knowledge on here which would know how to produce such a module and how to implement it,not necessarily something that would turn out advisors to the Chancellor more something that would show there is more to managing your finances than shorterm juggling and platespinning

Albermarle

cfw1994 said:

I think that part of the problem is this:

Maybe you need to adapt this a bit .
Young people are very interested in money , especially if they need some for a night out or some new clothes etc 
What they are not interested in is thinking about the long term , or even next week !

Langtang

Retireinten said:

Don't think we do enough to cover the basics (budgeting, living within your means, emergency funds, managing credit sensibly etc)

Very timely. I was speaking with my wife last night, reminiscing about younger days. 

When I was very young, my folks would give me pocket money for the week. I'd then split the money into 7 piles (of coins) - 1 for each day of the week. On the Tuesday, I went to my dad and told him that I'd spent all my pocket money, but a new comic was in the shop and I wanted to buy it. He was furious that I'd spent all my money by Tuesday. 
When he checked the place where I kept my pocket money he was pleasantly surprised to see that I'd only spent that day's pocket money, and not the whole lot. I didn't want to/ wouldn't think to dip in to Wednesday's money... not sure what happened in the years that followed....

TVAS

When I worked for Fidelity I overheard a conversation with young women and one of them said pensions are so boring. I said there is nothing boring about being an independent woman having your own money. 

What we are talking about is money, we call it pensions, we call it ISAs, etc but this is money and we need to look after and be in charge of our own money.

I do feel we need not just only about Financial education for retail investors but we also need to know how business works so we understand companies.

If we want this to be taught in schools we need to hire those in the private sector. This means that parents should teach their kids stuff that the schools are having to do. 

Parents should be teaching sex education and relationships, cooking, religious education leaving the schools to do the hard stuff such as Financial education.     

michaels

I don't know - the more people who can't be bothered to shop around, take expensive credit etc the more budget companies have to do intro offers, discounts for taking credit that can be paid off instantly etc etc

underground99

TVAS said:

I do feel we need not just only about Financial education for retail investors but we also need to know how business works so we understand companies.

If we want this to be taught in schools we need to hire those in the private sector. This means that parents should teach their kids stuff that the schools are having to do. 

Parents should be teaching sex education and relationships, cooking, religious education leaving the schools to do the hard stuff such as Financial education.     

I'm a big fan of the private sector as it's how I got my own practical experience and interest in finance, albeit I'd already done things like business studies and economics at school and finance at university.

However I don't think I agree that you have it entirely the right way round.

I mean, you're saying financial education is difficult while relationship/ sex stuff can be done by the parents. But a lot of parents are terrible at relationship stuff. For example, taking all marriages from 1964 to 2019, 33.3% ended in divorce. Not great for teaching by experience. And without a curriculum and external input how do they handle the educational stuff about the types of relationships they didn't practice themselves? 

Would parents perhaps be 'better' at teaching sex stuff rather than relationship stuff? Some aren't very good at contraception having never bothered with it, and others aren't very good at explaining STDs having never had any. And many kids would find it very awkward learning the mechanics of sex from their parents rather than independent parties (friends /schoolteachers).

I think if you tell parents their children are going to get a good financial education at school and thereby give the parents some ability to deny that their kids' lack of financial savvy is their own fault, many will embrace that chance to blame schools for their kids' lack of money smarts. Parents can and should give pointers, schools can and should give pointers, friends and colleagues and the senior people in a first 'grown up job' can and should give pointers. It's how we improve society by sharing knowledge.

As a general principle I can agree that parents should lead certain types of education so that school time can be focused on the stuff that needs more structure and complexity. And the average parent isn't money smart because the average person isn't money smart. So maybe a teacher could help. But: the problem is that whether the education is in relationships or baking or sex or macroeconomics, you can't presume the recipient of the education will use it for good. So just ticking a box to say they got the education doesn't mean the student is educated.

Money smarts isn't all about a bunch of theory.  I learned what compound interest was at school, in some basic maths class, long before I did the GSCE or A-level in maths. I did the business studies GCSE, I did the economics A-level. Moved away from home for uni and had the experience/ practice of living away from my parents with a fixed level of spending from loans and part time jobs. And I covered beginner, middling and advanced finance courses at degree level. Later, professional exams.

But as a student at Uni I still lived beyond my means, and when I started working with the other accounting graduates while some other uni friends were still students, I was trying to keep up with the Joneses  (staff at my accounting firm with a couple of years more experience and higher salaries) in terms of going out and spending money, while generously getting the rounds in for uni friends who didn't have jobs yet. And looking at clients' finances where a thousand pounds here or there didn't matter because the companies had millions or billions, so anything with only a few zeros on the end wasn't particularly material to their overall financial stability ... Result for me: personal debt

Within a few years of graduation I had lots of debt that was only serviceable because I was lucky enough to have and keep a high paying job. I couldn't say I didn't know the theory- I knew more about finance than many others my age, even doing exams covering corporate and personal tax. But ironically, thinking I knew it all (debt isn't a problem if you can service it, etc) was a negative for my personal financial well-being. Others with less formal education in finance and lower salaries had far more savings and disposable income than I did.

You can see the same going on today. People ignore or misuse their knowledge, and 'a little knowledge is dangerous'. A lot of the people who have seen the YouTube clips on how to do your due diligence on 'stonks that are sure to pop' will be taking that 'education' and make some big failures out of it, even though a few lucky ones get away with it to make the headlines that sucker more in. Meanwhile their friends who don't even know what a stock market is will just be saving their money in a regular saver account like mum and dad told them, and perhaps be much better equipped to fund the deposit on their first flat within a decade of leaving school.

.

bostonerimus

Some sort of financial literacy should be taught in schools that might include, budgeting, taxes, bank accounts, pensions and ISAs and the basics of compound interest, the cost of debt, interest rates etc.

Back in the 1970s our maths teacher did compound interest and natural growth ie 'e' and we also learned about bank accounts and how to balance a check book. But I think I had it easy going to university in the 1980s as I didn't have to borrow money or pay tuition and actually got a grant. Managing my bank account was easy, just spend less than the grant and either go on the dole or get a job in the summer to top things up. My first employer contributed 14% of my salary into a retirement annuity account and I put in 6% and 30 years later it's done well, but I didn't really understand what I was buying at the time.

IvanOpinion

One of the very first posts I made on this board (about 15 years ago) was about having specific financial education classes starting in primary school.  I reckon that given how efficient and on the ball our government and civil servants are, that they may find time to do something about this in between completing their expenses and the turn of the century.

I would also suggest that rather than wasting valuable curriculum time on dead/dying languages why not give more coverage to modern languages including sign language.

msallen

Its all well and good offering appropriate education, but whether the people that need to understand it will do so is another matter.

Hang around these boards for a while and take note of some of the abysmal grasp of basic maths on display from time to time. All those who are unable to work out 10% of something, or work out whether moving credit card debt with a BT/MT will save them money or not, had these basic arithmetical concepts explained to them ad nauseum whilst at school.

LHW99

msallen said:

Its all well and good offering appropriate education, but whether the people that need to understand it will do so is another matter.

Hang around these boards for a while and take note of some of the abysmal grasp of basic maths on display from time to time. All those who are unable to work out 10% of something, or work out whether moving credit card debt with a BT/MT will save them money or not, had these basic arithmetical concepts explained to them ad nauseum whilst at school.

Sadly that is the difference between "teaching" and "learning"