Should financial planning be part of the school curriculum?
An introduction to income tax, mortgages, credit cards, loans, interest rates, keeping your data safe, being aware of bogus emails … and much more besides.
It could mean the difference between prosperity and poverty in later life.
Infinity Financial Solutions, a provider of wealth management services, warned: “The failure to teach financial skills in school has resulted in a generation of financially illiterate individuals.
“Whoever you are and whatever you do, financial literacy is critical. All of us need to know the money management basics such as how debt works, why it’s a bad idea to go on a spending spree with a credit card, how to budget within our means, the importance of saving and how to get the best out of your savings. Yet very little of this stuff is taught at school.
“Lessons in the basic concepts of personal money management such as how to read a bank statement, how personal loans and credit cards work and what an overdraft is would be of benefit to all students. Subjects such as understanding debt and the concepts of interest, compounding, budgeting and taxation would help practice maths skills and give a relatable context to what can be a very dry subject for some.”
The firm also stresses the need to start early given evidence that children’s financial habits are formed by the time they are seven.
It went on: “Obviously, lessons need to be age-appropriate but it would help prevent many young people from getting stuck into a cycle of debt.
“Every time we spend money we make a choice to buy one thing which inevitably means sacrificing others. While for a child that might mean selecting the Transformer robot over the remote-controlled car or, for a teenager, choosing between a new pair of trainers or a Switch game, when we become adults the stakes are higher. As soon as we become financially independent we need to prioritise life’s basics such as rent, food and bills over luxuries such as new gadgets or holidays.”
Forbes Money is equally assertive.
It states: “At 18 years old, kids are thrust out into a world where every step they take from graduation to retirement will be directly impacted by their financial knowledge and money management skills. Career decisions, buying your first house, getting married, having children – finances all play a massive role in each of these life events.
“And it’s not just the major ones; every day we are faced with financial decisions.
“Young adults lack the experience and education to make these decisions – big or small.”
Financial problems can lead to divorce, poor health, depression, and bankruptcy, it points out.
Conversely, smart financial decisions can positively affect a person’s credit score, saving them thousands of pounds.
Research shows that a majority of children and young people say they find financial education useful, claims the Money and Pensions Service, a government-affiliated body seeking to help improve financial education provision in school, at home and in the community.
It notes: “It can bring the maths curriculum to life using examples relevant to students’ lives, or can be incorporated into personal development, health and wellbeing and citizenship topics.
“You could organise a school savings bank, support groups of students to open bank accounts or give children the opportunity to manage a budget.”
Meantime, until money management lessons are taught in schools, it’s down to parents, grandparents, uncles and aunts.
Nevertheless, it’s never too late to learn. There are plenty of excellent books and websites out there.
Alternatively, seek the help of a financial adviser.