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What Should be Included in a Financial Education Curriculum?

January 18th, 2014 Posted in financial education in schools
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financial education in schools imageFinancial education is something that many feel should be a staple of the national curriculum. Many parents feel that their children are currently leaving school at the age of 16 or 18 with very little knowledge of finance or money management.

When considering the inclusion of financial education within the curriculum the government toyed with a number of ideas. Some felt that it should be covered off within Mathematics; others felt it should be a module within business studies or economics however some still felt that the only effective way would be to commit a few hours per week to a specialist subject known as ‘financial education’.

With this in mind many are asking the question; what should be included within the curriculum? What would offer genuine value to students and help them when making important financial decisions in the future? Throughout this article we are going to discuss 3 topics that we think should be included:

1.     Budgeting and Money Management

We think budgeting and managing money should be at the top of the curriculum. It has been in the news recently that more and more young adults are getting into trouble with short term credit sources like payday loans due to ill-managed finances; this simply reinforces that worries that many have regarding a lack of financial education.

Firstly, students could be taught how to create a budget including splitting their income and outgoings and calculating their disposable income. Tips could then be offered on how to increase their disposable income by making cutbacks and saving money. Emphasis could be placed upon the importance of living within your means, setting financial goals and the dangers of overspending.

2.     Loans and Mortgages

Within this topic teachers could explain the different types of loans available and where they are available from. Popular loan and mortgage related jargon such as APR, interest and repayments could be broken down to make it understandable. Credit history could also be included within this topic, showing case studies of the effects of failing to repay loans and the importance of having a good credit score when applying for loans, mortgages or credit cards.

Although it may be a number of years before students are looking to apply for mortgages we think it’s important they are taught the basics. Sub-topics could include where you get the mortgages from, deposits, repayments and remortgaging.  Special emphasis could be placed upon schemes that designed to help young adults get on the property ladder such as Help-to-Buy.

3.     Saving and Investing

The final topic that we think should make it onto the curriculum is saving and investing. It is inevitable that at some point students will find themselves with surplus cash and it is therefore important that they know what to do with it.

Throughout this topic, students could be taught about savings accounts and the different types of accounts available such as fixed rate bonds, instant access accounts and ISAs.  Within this topic students could also learn about emergency funds and the importance of having one to cover unexpected expenses.

Although it is likely that some types of investing (such as stocks and shares) will be covered off within business and economic studies, we believe it’s worth cross referencing it within the financial studies curriculum. Along with stocks and shares students could learn about investing in property, technology and gold.

If financial education does make it onto the curriculum then making it fun for students is very important. The last thing we want is for students to walk out of the lessons feeling negative about the future of their finances. We believe that the subject should be very hands-on with frequent use of fake money to illustrate the various topics. What would you include within the financial education curriculum? Let us know by commenting below.

This article has been brought to you courtesy of Marie. Marie endeavours to help her readers understand personal finance by writing how to guides and top tip articles on a variety of sub-topics. You can read more of her work by clicking here

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Financial Literacy Success

October 29th, 2013 Posted in financial education in schools
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fiji imageFor a while now I have been following the progress of a financial education programme in Fiji. It seems to me that if a relatively small country in the Pacific can get its act together and provide meaningful financial education for its children then countries closer to home should take a look and see what can be learned.

Here’s the latest courtesy of the Fiji Times:

CLOSE to 200,000 students in more than 900 schools now have access to financial literacy programs, thanks to an initiative by the Ministry of Education and the Pacific Financial Inclusion Program.

This was the message from the deputy secretary for Education Kelera Taloga while speaking at the Pacific Microfinance Week workshop in Nadi yesterday.

She informed microfinance stakeholders that the Fiji Financial Education Curriculum Development Project involved the strengthening of financial education within the school curriculum for primary and secondary schools.

“We have identified that financial education is something that has been lacking so we have rolled this program out to 735 primary and 175 secondary schools across the nation,” Ms Taloga said.

“We want our children to develop financial competencies and the best way we have identified to implement this is in the classroom.”

Ms Taloga said there were no extra teaching hours or classes, no existing subjects replaced and no change in timetables — resulting in minimal disruption to normal classes.

She added that financial education at schools marked the first step in a three-phase program

 

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What Schools Should Be Teaching Kids About Money (and aren’t)

January 12th, 2013 Posted in financial education in schools, financial literacy for kids, kids and money, Uncategorized
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kis and moneyThe school day is relatively short, so it’s natural that some subjects will get less coverage than others. But the financial education of children has often been sorely lacking, with teachers leaving it up to parents to teach the fundamentals of how to save and spend safely. With the rocky economy we now find ourselves in, it is more important than ever that kids are taught how to be financially self-sufficient. Here are the three things we think they should be teaching about money in schools, and how you can help your kids in the meantime.

 

Not all savings are the same

ISAs, Bonds, Instant Access Savings, Notice Accounts… Even as an adult the choices can be confusing. So why are we suggesting these tricky concepts should be introduced to a child? Because when the Channel 4 programme SuperScrimpers asked people on the street, many had not even heard of ISAs, let alone knew the differences between each version. We’re not suggesting your kids should have an in-depth knowledge of each savings account, simply that they know they have options.  And if you sit down with them next time you’re thinking about changing accounts, and talk them through what you’re doing, they will quickly learn how to go about researching their different choices.

Money doesn’t just come out of the Hole in the Wall

There was once a little boy who wanted a new toy. He asked his mum but she said she couldn’t afford it right now. The little boy thought about this for a moment, and then piped up happily, ‘we can just go and get some from the hole in the wall’.

What’s the lesson from this tale? Well, firstly it shows that kids are exceptionally optimistic. But more importantly it reveals the lack of awareness often shown by children about where money comes from. And the problem is growing rapidly due to the onset of credit and debit cards: teachers have reported that those kids whose parents pay predominantly by card are less aware of the value of money than those whose parents still hand over notes and coins.

Once they’re old enough, encouraging your children to take a part time job is one of the best ways to teach them where money comes from (and they will soon see how quickly it can be spent). But to help earlier on, make sure they are introduced to physical money, and talk with them about where your earnings come from. Even playing with the fake money in board games can be educational, but as you play, please remember…

Saving all your money isn’t always the answer

Don’t get us wrong; encouraging a savings habit is hugely important. But growing up with the constant message that you can never touch your money can be just as harmful as the idea that constant spending will fix everything. Some people have been known to save and save, whilst never feeling they could actually spend any of their hard earned cash. Such an attitude can encourage stinginess and create continual dissatisfaction with what you already have. A controlled spending habit, where you set boundaries and create goals, is one of the best ways to foster a healthy attitude towards money.

Are there other key lessons you think schools should be teaching kids? Let us know below.

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Making Finance Fun in Primary Schools

March 12th, 2012 Posted in financial education in schools, kids and money
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Here is an article recently published in Primary Teacher Update exploring how primary teachers can teach younger children about money.

Summary
However you approach financial literacy, remember the three essential
elements – make it Relevant, Appropriate and Fun.

Teaching children about money does not have to be complicated, full of difficult maths or require you to be an expert.

Helping them develop the essential life skill of managing their money is both rewarding and enjoyable. It is also worth remembering that one day their taxes will be paying for your pension!

Resources available
 A good place to start is the pfeg website (www.pfeg.org.uk). This is a charity set up specifically to help teachers deliver financial education. It can provide guidance, materials and even experts to come and visit the school. All the recommended resources have been assessed and passed as fit for use in the classroom.
 Many high street banks and building societies offer financial literacy programmes. It can be helpful to have a member of their staff visit and talk about what they do. Be careful, however, that they are promoting your agenda as well as their own.
 The Financial Fairy Tales are a series of books accompanied by activities and a teachers’ guide. They are designed to make learning about money fun by presenting values and techniques through stories and activities.

A free story and sample materials are available to readers from
www.thefinancialfairytales.com/ schools.

Please share with your colleagues and feel free to leave your comments. The full article can be downloaded below:

Financial Fun in Primary Schools

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Mandatory Bank Accounts for 16 Year Olds?

February 15th, 2012 Posted in financial education in schools
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Mandatory Bank Accounts for 16 Year Olds? - Monopoly board financial education image
Photo by Suzy Hazelwood from Pexels

The Government is facing calls to help youngsters better understand their finances by giving all 16 year olds a bank account.

The scheme would work by giving 16 year olds a bank account when they receive their National Insurance number, said Simon Culhane, chief executive of the Chartered Institute for Securities & Investment (CISI).

Making personal finance a more important part of the national curriculum has also been urged.

A system whereby a 16 year old only has to complete one form to decide which bank they would like to join has been raised.

Mr Culhane said the initiative would help children understand personal finance at a much younger age, especially as online payments and transfers become more popular.

At The Financial Fairy Tales we applaud the encouragement for young people to open bank accounts and a simplification of the account opening process which can be daunting to many youngsters. Making something mandatory however makes us more uneasy. After all you can lead a horse to water but you cannot make it drink. In other words forcing youngsters to open accounts will not automatically lead to their use or an improvement in financial literacy.

The suggestion comes after last month’s debate in the House of Commons about making finance lessons a bigger part of children’s learning – a proposal which garnered support from all parties.

There are worries that children are not being suitably prepared to deal with their finances.

Within families, about 19% of parents have never discussed with their teenagers how to spend money and 32% have yet to talk about how to budget, or even describe what one is, while only 36% of people understand that the term APR relates to interest payments.

Currently, aspects of personal finance are covered in the personal, social health and education module taught in schools, but there are no exams to take.

The CISI says the current system does not go far enough and is ‘almost universally derided by pupils and teachers alike’.

There have been movements towards making financial education part of the national curriculum in England and Wales from the next review. However we would urge that it is not buried in a Maths curriculum which is already failing many young people but rather integrated into life skills and PSHE sessions to draw upon the skills and experience from other subject areas.

 

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