Falling into debt, being scammed and general bad money habits are all results are of a poor financial education, and for young people, the inability to make informed decisions in an economic climate such as ours has serious consequences.
A survey conducted by prepaid card service iCount have raised questions about the state of our children’s financial education.
What is financial education?
As the majority of the UK’s adult population have never received any money management lessons, financial education is a programme of study that aims to equip young people with the key attributes that come with managing their money well.
The idea behind teaching financial education as part of the national curriculum is to encourage children to make smarter financial decisions as they get older and have more money to manage.
However, with research from iCount, this may not be enough, it shows that the majority of British adults think that children should learn the value of money from age 5; however, in the UK, financial education starts at age 11.
Why is it important?
With new technology, we are shifting towards a society where cash is becoming futile; and with more financial products than ever before, younger people are struggling to navigate their personal finance and make smart decisions where money is concerned.
In 2014 financial education became part of the national curriculum which means every child in government schools will have some form of money management lessons.
However, as this is only part of the national curriculum, it Is only compulsory for about half of schools; the rest are academies or free schools that do not need to abide by this.
Learning from an early age
The survey also showed that just 10% of parents think that age 11 is early enough to learn financial education in school. With words such a VAT and APR appearing in GCSE maths papers, and no prior financial understanding behind them; a reason why many children are not performing in maths classes can be due to this.
One way of improving a children’s financial education early can be to include them in decisions about your money as this will help develop the right financial behaviours for the future. For example, you can sit down and show them how you budget a weekly food shop and ask them to try it on their own.
Taking a thinking outside of the box approach also may yield educational properties. For example, when a child first gets the first bank account, it usually comes with a debit card, which becomes easy to spend all of the money in the account. A prepaid card, however, lets you load cash onto it and use it the same places.
Prepaid cards are perfect if you want to teach teenagers how to spend responsibly. They will ultimately learn a vital lesson; if you don’t have money on it, you can’t spend it.