Is there a lack of financial education in the UK from family and schools?

badmemory

People's financial ignorance stopped amazing me an awful lot of years ago.  I had a yong girl working for me who had a card for one of those type shops.  Borrow £20 & pay back £x a month.  She actually thought she could spend £20 a month for the same amount.  I tried to explain but I don't think she believed me,  Thankfully she left before the proverbial hit the fan

purplevamp

They were talking about this when my eldest son was at school.  He's now 34!!!  When I was at school we had a savings scheme, where we could bring in some money each week to "save up".  It was only about 5p or 10p.  I don't actually remember what happened to that money though...

annielyn

I definitely think that more could be done on Financial Education in schools. I would agree that maybe incorporating this into Maths lessons would be the obvious way forward so that what they are learning has practical applications.

I also think that this can be backed up in the home.

Growing up (in the 60's) my father was paid monthly into his bank account. He then drew out the cash needed for the month ahead. I remember clearly sitting at the dining room table with him and a stack of envelopes marked Food, Clothing, Petrol etc and helping him put the allocated amount into each envelope. That was the budget for the month, when its gone, its gone. That has stuck with me and I still budget similarly today (not in cash!) but I like to allocate a certain amount to each expense each month and an amount into savings for annual expenses.

Today children often have their own bank accounts and managing these can be a way of educating, When my grandchildren get money given for birthdays and Christmas they usually spend 10% on things they want and save 90%. They enjoy seeing the interest mount up on their accounts and my son has used this as a moment to teach about the effect of compounding.

badmemory

There was actually another reason for drawing the whole lot in one transaction back then.  The banks used to charge per transaction, no free banking.  It makes a difference to how you run your finances.

annielyn

badmemory said:

There was actually another reason for drawing the whole lot in one transaction back then.  The banks used to charge per transaction, no free banking.  It makes a difference to how you run your finances.

Yes of course, it wouldn't be the way most people would manage their finances today, its a different world.

I was merely using it as an example of the influence parents can have on their children regarding how they manage their money.

mlz1413

osmarks said:

mlz1413 said:

I think just changing maths questions in school to be based in reality would help!
As in, how many hours do you need to work at NMW to buy all your mates drinks on a Friday night.
Or buy the latest phone at £1000. Or buy a new pair of trainers.
Would is the best phone contract. Etc.

This would be soooo much more relatable than a bath is dripping at X and your bucket holds Y.
Or when will bus A and bus B cross paths.

You can only write simple arithmetic questions like this, not any interesting, nontrivial mathematics. In any case, I think most people's problems with mathematics education run deeper than you can fix by reskinning questions slightly.

It only needs to be simple questions,  those who can do algorithms and algebra probably dont get into as much debt as those not engaged in maths because they 'don't get it'

Also having recently tried to compare electric tariffs for my company I found i needed a spreadsheet to truly compare the various offers due to standing charges and unit rates being so different. 

kimwp

Having now tutored for GCSE higher maths and foundation, I do think the foundation should be more geared towards practical maths.

In terms of what this website/Martin could do - gamify it! 

subjecttocontract

Basic finance is already included in maths lessons, it's just called something else. 

DiamondLil

subjecttocontract said:

Basic finance is already included in maths lessons, it's just called something else. 

Chatting with my 15 year old grandson, I mentioned he ought to read up on compound interest and learn a bit about personal finance. His reply" I already understand about compound interest from maths lessons".

At least they are learning the basics I hope.

onomatopoeia99

DiamondLil said:

subjecttocontract said:

Basic finance is already included in maths lessons, it's just called something else. 

Chatting with my 15 year old grandson, I mentioned he ought to read up on compound interest and learn a bit about personal finance. His reply" I already understand about compound interest from maths lessons".

At least they are learning the basics I hope.

Compund interest uses exponents (aka "raise to the power of"), which is one of those building blocks needed at or before GCSE level.  

Once you understand exponents and how to turn a percentage into a multiplier then you've got all you need to calculate compound interest, which should definitely be within the capabilities of a 13 year old that has listened in maths lessons.

Calculating a monthly interest rate from an annual rate is more involved. Time to crack open the log tables.or get out the slide rule.