Mission possible: educating the young in financial literacy

With MPs having just debated making financial education a compulsory part of the school curriculum[1], the subject of educating the young in financial literacy is more relevant than ever.

A report, Financial Education and the Curriculum, by the all-party parliamentary group on financial education for young people has argued that if financial education were compulsory, then it would be easier to tackle household debt crisis and personal debt and insolvency levels.

Also recommended was extra training for teachers, and a senior staff member at each secondary school to be a ëchampioní of personal finance education and to encourage participation.

Shadow Chancellor Ed Balls said[2]: ìEducation is about giving young people the skills and knowledge they need to get on in life, which is why I think it’s now time that every child should not only learn the 3Rs at school but about pensions and saving, borrowing and mortgages too.î

Britainís best-known money-saving expert Martin Lewis has long called for financial education to become compulsory, and an e-petition driven by him, signed by over 100,000 people, resulted in the House of Commons debating such a measure on 15 December.

ìWeíre a financially illiterate nation, with millions caught by mis-selling, overborrowing and being ripped off,î Lewis argues.

ìCompanies spend billions on marketing and teaching their staff to sell ñ itís time we got buyersí training. The most cost-effective way to start is to ensure every child in the country gets a basic understanding of personal finance and consumer rights before leaving school.î

Indeed, it is arguable that if more children got a firm grounding in understanding finance then it may have a good effect on the way they behave as they enter adulthood.

James Jones, Head of Consumer Affairs at Experian says: ìExperian has supported the teaching of personal finance in schools for several years and many already use our accredited resources. Educating children on money issues is a real no-brainer and we very much support moves to make money lessons compulsory right across the UK.î

The theory goes that if young people can learn the true value of money, and the ways that most people attain it (through achievement as opposed to through crime), then could it have a positive effect on how they go on to manage their money and perform in society? One would hope so.

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