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As exam season reaches its peak, we’re delighted to share a guest blog from our good friends at The Money Charity. Steph Hayter, who heads up their Young People programmes examines the current state of play of Financial Education for children and asks what skills and knowledge they should gain prior to entering further education and the workplace.
When I tell people about what I do, I often get the response: “I wish I had learnt about that at school”, shortly followed by “it really should be on the curriculum”! Financial Education seems to be an area that everyone agrees is important, but few people know much about. So, let’s explore the current state of play of Financial Education for children…
Why isn’t Financial Education on the curriculum?
You might be surprised that it actually is! Financial Education was introduced to the secondary curriculum in England in 2014 and was already on the Welsh, Scottish and Northern Irish curriculums.
Whilst it was great to see the importance of understanding and managing money finally recognised as something all young people should have the skills and capabilities to do, the sad fact remains that it’s had less impact on what’s actually taught in schools than we hoped. For a start, many teachers themselves aren’t even aware that it’s on the curriculum. (Our research in 2016 found an astonishing 1 in 3 teachers were unaware.)
No natural home on curriculum
There are many other limitations and challenges. Financial Education doesn’t have a natural subject home or specialist teachers. It not only sits across the maths and citizenship curriculums, but is also in (non-statutory) Personal Social Health Education (PSHE). This means that it’s taught by all kinds of teachers, from Maths to PE and Music, who aren’t necessarily financially capable themselves, and whose ability to deliver effective Financial Education varies. When it was introduced into the curriculum, no extra funding for training or resources was provided, meaning that teachers simply have to do their best or rely on outside support from organisations like ourselves, which receive no government funding.
In our work, we find that while most schools deliver some form of Financial Education, teachers have little faith in its quality, and are held back by insufficient time, negligible resources and a leadership who don’t view it as a high priority. Teachers we surveyed called for greater resources, clearer leadership, and a mixed model of provision that includes direct delivery by experts from outside schools.
What should children be learning about money?
Good Financial Education is about far more than just ensuring children can recall facts and understand terminology around personal finance. It should aim to have an impact on their knowledge, attitudes and behaviours. We need to set them up to be able to manage their money successfully when they enter the workplace or further education and become independent.
Being financially capable is all about:
- Having the confidence to ask questions.
- Setting your own goals and priorities.
- Being able to do independent research and be in control of your spending behaviours.
- Weighing up the pros and cons of different options and making the right decisions for your situation and personality.
- Using money and the right financial products to help you make your goals become a reality.
Shouldn’t we warn children of the perils of debt?
Adults can have strong opinions about what Financial Education should be teaching children, particularly around the perils of debt, but we feel it’s important to be as impartial and non-judgemental as possible when talking about money with young people.
Whether we like it or not, borrowing money is part of how our society works, so if we simply teach our children about how terrible it is, we’re doing them a disservice. If they want to go to university or buy a home, unless they’re very lucky, the chances are they’ll have to borrow money to be able to do so. And whatever their situation, the day they turn 18, they’ll be targeted by companies wanting to lend to them. Therefore, they need to be equipped with the skills to help choose the right products for them and to decide whether they want to borrow at all.
In our school workshops, we cover: Planning, budgeting, saving, borrowing, insurance, pensions, student finance, mortgages and much more. You might think that some of these topics are too far in the future to be relevant to school children. Why would they want or need to know about something they are unlikely to use for decades, if ever?
Well, you’d be surprised. We find that the 11-19 year olds we deliver workshops to are fascinated by these topics and full of questions about them. They hear their parents talking about mortgages, read about the increasing cost of living on news websites, and see payday loans advertised on TV. And they worry. The earlier we demystify these topics and help young people to start thinking in an informed way about how they will manage their money, the better.
Is your child learning about money at school
Something we can all do to encourage schools to teach Financial Education is actually asking the schools our own kids go to what they are doing. If they aren’t currently delivering Financial Education, or you think they should be doing more, there are lots of organisations, including The Money Charity, that can help in lots of different ways, either by delivering Financial Education workshops, or providing teachers with resources to deliver them themselves.
Showing you’re interested in Financial Education as a parent will help push it up your school’s list of priorities.
What can parents teach at home?
As a parent, there is also a lot you can do outside of school to help your children.
- Encourage a savings habit: By giving your children pocket money you can help them learn that just because you have money, it doesn’t mean it needs to be spent all at once. For older children, it’s worth opening a savings account – so they can see and manage their money online and start to see how interest works.
- Be consistent: If you give your children pocket money, it can be better to do so on a regular basis (rather than at irregular intervals with the amounts varying) – which can make it easier for them to understand about having a regular income, and about how to manage money for themselves.
- Don’t spend it all at once: It’s important for children to understand that if, for example, they spend all their allowance in one go, that’s it for the month.
- Show them that hard work can be rewarded: As children get older, you can start linking the money you give them to completing a small job, or jobs, around the house – something that can help them start to see the connection between work and earning money.
- Practice budgeting: When you go food shopping for example, why not give them a set amount of money to see what they can buy on a budget.
- Decode financial jargon: Help them understand what terms such as APR are and how they can really impact their financial futures.
Nirvana – What would the impact be if all young people did receive effective Financial Education?
The evidence shows that once children establish healthy financial habits, they stick with them.
Imagine a world where an effective Financial Education in all schools produces future focused young adults who can stay on top of their money, have the confidence to research financial products and ask questions and make the right financial choices for them.
They’d be more financially capable as they enter further education and the workforce, better able to achieve their goals and dreams, maintain mental and Financial Wellness, and be present and productive in their jobs. Not only would they personally benefit, but so would their employers and the UK economy.
This guest blog was provided by Stephanie Hayter, Head of Young People Programmes at The Money Charity.
The Money Charity is the UK’s only dedicated financial capability charity. We exist to help everybody in the U.K (both young people and adults) stay on top of their finances; helping people across the U.K. make the most of their money and to live happier and more positive lives as a result. We do this, through four main strands of work, with young people, with adults, with the industry and through policy, advocacy & media.
The Money Charity delivers around 1,000 hours of Money Workshops each year in schools and colleges across England, Wales and Northern Ireland, and has reached over 180,000 young people since 2010. The charity also provides financial education Teacher Resource Packs, and Student Money Manuals.