Finance education for children

Posted by Sharon Yewen in Personal Finance on 13 September 2012 - Sharon is Financial Controller at checkmyfile.

A recent study commissioned by the charities National Children’s Bureau (NCB) and Personal Finance Education Group (PFEG) found that 96% of children aged 7-16 years old want finance education lessons in school.

Tracey Bleakely, Chief Executive of PFEG, says, “We have to ensure that young people are given the skills they need to make informed decisions about their finances.”

Indeed the Department of Education is considering making finance lessons mandatory. In Northern Ireland personal finance lessons in schools are compulsory, whereas there is currently no statutory requirement to teach financial education in England, Scotland and Wales.

The National Curriculum is being reviewed with new plans for all subjects to be introduced in September 2014.

Ministers have said that financial education is being considered as part of this review.

The DFE says, “It is vital that we help young people understand the world of work and how to manage money”.

It is important for children as they grow up to enter adulthood with a grasp of personal finance so they are able to manage their own money effectively, especially as many leave university with large student loans to pay back.

People these days are increasingly finding themselves in debt as a result of poor budgeting and mismanaging their money, leading to further problems when trying to obtain credit or applying for a mortgage.

Teaching the value of money to children should start at an early age at home and it is equally important that we as parents guide our little ones financially.

I know that my young children have said how great it is that when we need money we can just go to the cash machine and get some! They need to realise that we can only take out what we have put in by working for it.

Giving children weekly pocket money is a good way of getting them to understand the cost of things they want to buy as they start to learn what they can afford with the money they have and whether they need to save up for something special.

Many schools are adopting the ‘cash free’ approach which means that no cash is taken into school and parents must register a ‘Parentpay’ account which is kept topped up with money. All school trips and other similar school activities are paid for online, as are school lunches and break time tuck.

While this seems a good idea for the efficiency of running the school day I do wonder whether it detracts from the children’s concept of money.

If they wanted a snack at break time they used to have to hand over 50p, but now no money is exchanged so they think it is all free, even though the system is explained to them.

Formal finance lessons are all very well but children also need to experience the practical side of money management.

Sharon Yewen is Financial Controller at Checkmyfile. She is an FCA and has a degree in accountancy from the University of Exeter. You can contact Sharon at sharon.yewen@checkmyfile.com

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