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Financial Education Compulsory For Schools?

December 16th, 2011 Posted in financial education in schools
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UK Government to consider making financial education a compulsory part of the school curriculum.

Earlier this week, the All Party Parliamentary Group (APPG) on Financial Education for Young People, which has the support of 226 MPs and Peers, issued a report calling for compulsory money lessons.

Pictured is Daniel Britton from The Financial Fairy Tales with Martin Lewis and Carol Vorderman at the House of Commons Launch. Daniel contributed evidence to the enquiry based upon his extensive experience with financial education from primary schools to young adults.

One of the main recommendations is teaching split between maths and Personal, Social, Health and Economic (PSHE) studies.

Government pledge

Nick Gibb, Minister for Schools, said: “I think we’re all in agreement about the importance of good quality financial education. It is true that young people are growing up in a materialistic world that they are not prepared for.”

Gibb added the Government said the APPG report’s proposals will be included in a review of the national curriculum.

He also confirmed PSHE won’t be compulsory in the curriculum but it is possible for elements of it to be compulsory, of which financial education could be one part.

Earlier today, Shadow Chancellor Ed Balls, writing for MoneySavingExpert.com, said young people must be taught about money matters.

There was also much consensus in the debate that including financial education as part of maths could make maths a more attractive subject a move championed by TV’s Carol Vorderman

Conservative MP Justin Tomlinson, chairman of the APPG, led the calls for financial education to be made compulsory, and to be taught at both primary and secondary schools.

Tomlinson said the next generation needs to be equipped with the key skills to understand issues such as how to compare energy tariffs and how to calculate APR and interest rates.

He said: “We have a duty to equip people to make informed decisions, so they can understand the implications of what they are doing based on their own circumstances.”

Widespread support

Conservative MP Andrew Percy, chairman of the APPG inquiry, said at the debate: “This is about real maths skills, about using real life experiences to support the drive for ensuring our young people enter this complex financial world in a position to make better decisions.”

Labour MP Jenny Chapman said: “An investment in knowledge always pays the best interest.”

Martin Lewis, MoneySavingExpert.com creator, says: “In many ways, this was Parliamentary discussion at its best. Of the members who were there, many noted the importance of the e-petition and the number of constituents who contacted them who said it was important.

“This is by no means the end of the battle but it is a firm foundation that slaps the campaign into ministers’ faces and leaves them in no uncertain terms that unless this is taken seriously, not just the signatories of the petition, but many MPs, will be on their backs.”

Download the full report from the pfeg website here

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10 Reasons Why Money Skills Should be Taught in Schools

December 2nd, 2011 Posted in financial education in schools, teaching children about money
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We all know that schools are supposed to teach reading, writing, and arithmetic, but what about the ability to handle money? With more Americans in debt now than ever, it seems to be logical that students be taught more than just who is on the money. Below, we have gathered a list of ten reasons why money skills should be taught in schools.

1. Too much debt – As noted above, more and more Americans are faced with more debt than ever. This can include house payments, student loans, bank loans, and much more. Having too much debt can cripple a family or individual and should definitely be taught in schools.

2. Credit cards – Another way people pile up so much debt is through the lure of credit cards. By promising a big rush now, consumers often run up their limits within a period of months and can spend years paying it all back. Teaching how credit cards really work, along with the topic of compounded interest, can give the kids a truly valuable lesson.

Perhaps you could use this credit card calculator to show them how long it would take to repay a credit card.

3. Bankruptcy – Other than paying debt off, bankruptcy is another way people get out of debt. Not only does bankruptcy carry a high penalty for those filing for it, it is also bad for the economy as a whole.

4. Foreclosure – If you own your own home or are making payments on it, getting too far into debt can put your biggest investment at stake, your home. This is doubly so for people who take out a second line of credit on their house and is taught too little in schools.

5. Retirement – It may sound like a far off time for your students, but having a retirement plan is never a bad idea. Having teachers explain why saving for retirement can be a good and rewarding thing.

6. College – This major event will come as soon as students are done with high school. Teaching kids about money will better prepare them for the world of college where everything from tuition to toilet paper can be an expense.

7. Budget planning – No matter what age the children are, if they can count, they can make a budget. This includes having teachers give children an imaginary income, family, expenses, and having them plan out what they want to spend on what.

8. Investing – Older children can take on this challenge. Have the children invest an imaginary amount of money in a stock. Then have them check it daily to see how much it rose and fell.

9. Taxes – No matter what your students go on to be, they will have to pay taxes on it. Have the children fill out mock 1040 forms to see how much they will pay in taxes, social security, etc.

10. Saving – One of the most important money skills ever, kids see far too much of celebrities flashing their cash and too few who save money. Teaching them the pro’s and con’s of each will give them a good foundation in the future.

Holly Kearny manages the site Teaching Degree. Her site helps students find the right college to get a teaching degree.

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Compulsory financial education in schools

November 7th, 2011 Posted in financial education in schools
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Over 100,000 people have now signed the petition calling for compulsory financial education in schools, which means it must be considered for a Parliamentary debate.

The petition championed by Martin Lewis at Money Saving Expert hit the magic 100,000 number last night, showing the enormous nationwide support for the campaign to help rid the nation of financial illiteracy, which can lead to serious debt problems.

(click here to sign the e-petition on the Government’s website).

This is the trigger by which all issues raised in Government e-petitions are considered for debate in the House of Commons .

As Conservative MP Justin Tomlinson has agreed to sponsor the petition, it stands a good chance of a Commons airing.

The issue is already on the political radar as over 250 MPs are part of the All Party Parliamentary Group (APPG) on Financial Education for Young People, which also calls for compulsory money lessons.

The petition also has the support of numerous consumer groups such as Which? and the Consumer Credit Counselling Service plus of course The Financial Fairy Tales.

Martin Lewis, MoneySavingExpert.com creator, says: “Thanks to everyone who’s signed the petition and played their part in putting this on the political agenda.

“Politicians of every party should hang their heads in shame. It’s a national disgrace: in the 20 years since student loans came in, we’ve educated our youth into debt when they go to university, but never about debt.”

“We’re a financially illiterate nation, with millions caught by mis-selling, over-borrowing and being ripped off. The easiest, cheapest and most important fix is to get financial education in every school.

Many wonderfully already do this, yet most don’t. The problem is unless it is compulsory, head teachers can’t focus resources to make it happen. Hopefully, this petition will be a major step to change that.”

Debate moves closer

Tomlinson, who set up the APPG, says it is vital we educate the next generation about personal finance.

He says: “I am delighted financial education is supported by so many people, and passing the 100,000 barrier on the e-petitions system is a real, major boost to our campaign.

“We are shortly set to conclude our nine-month inquiry looking at how we can deliver compulsory financial education as part of the national curriculum.

“The 100,000 signatures to the e-petition will help us secure Parliamentary time on this subject, essential for raising the profile of our report with key ministerial decision makers.”

Financial education was due to become part of the curriculum underthe previous Labour Government when then School’s Minister Ed Balls, along with Martin Lewis, launched the proposals in January 2010.

However, as those plans were tied in with sex education, they were scrapped because of the row over teaching sex to kids ahead of last year’s General Election.

 

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Financial Education – a paradigm shift?

June 16th, 2010 Posted in financial education, financial education in schools, financial literacy, financial literacy for kids
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In a recent radio interview I was asked whether Financial Education was present in many classrooms.

In my view the school curriculum in many cases is based on preparing children and young people for a working life which no longer exists.

In the old industrial economy, many did have jobs for life and a good education could bring a safe career. In the information age things have changed.

Communications and information technology mean that you are not just in competition with local kids for a job but with people worldwide. Many of whom, dare I say it, are willing to work harder, for longer, for less pay.

The answer in my opinion is to provide the skills and attitudes to enable our young people to not merely survive but thrive in the new economy. Self reliance, positivity, financial sense and enterprise awareness will all be highly valuable regardless of whether they enter a corporate path, self employment, or quite likely a mix of career and employment over their working lives.

Listen to the interview here

Please add your comments below

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US Educators Not Prepared to Teach Financial Literacy

May 17th, 2010 Posted in financial education, financial education in schools, financial literacy
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Importance of Financial Literacy

Eighty-nine percent of teachers agree or strongly agree that students should take a financial literacy course or pass a test for high school graduation.
 
Current Teaching
Only 29 percent of teachers are teaching financial education in any way—in existing classes or special classes on finance topics. And fewer than 20 percent of teachers reported feeling “very competent” to teach any of the six personal finance topics surveyed.
 
Using State Standards
Nearly 64 percent of teachers feel not well qualified to use their state’s financial literacy standards. In fact, the study found no influence of state mandates on whether a teacher had taken a course in personal finance, taught a course, or felt competent to teach a course.
 
Teacher Education Faculty
Teacher education faculty felt no more competent to teach specific financial concepts than did K-12 teachers, and they were not more familiar with state financial education standards.
Read the full release here

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