Make financial education compulsory

I am all for students/newly employed workers getting some financial heads up however as a combined effort maybe all those companies that lend/borrow money should have tighter restrictions so that only those that can afford it actually get it. Maybe even have certain tiers pertaining to their age as to a maximum of how much they can borrow ion the hope that when they do reach a certain age they will have already had some grounding when it comes to financial situations without putting themselves into masses of debt.

Dont think the blame can be squarely leveled towards the 'non education' excuse.

 

I kind of get the point, but I can see the glazed look on the students faces - this is going to seem so irrelevant to the majority there.

To be honest I think very similar is true of 'Finance for non-finance managers' courses - unless you can make the information relevant, then the information goes in one ear and out the other.

I think this is University of Life stuff, with a healthy dose of realism from the lenders

Lots of moral high ground here

 

 

But if a ‘financial’ subject is put alongside Art, R.E, Woodwork etc. they would have to learn it. I’m not suggesting this just be a small training scheme in schools, it needs to be a full subject. For most people it’s more import than a lot of the subjects that children are forced to currently learn.

Currently ‘the school of life’ is not working. People lending money that they couldn’t afford is the root cause of the recession, greedy banks obviously played there part as well.’ learn by your mistakes’ is the worst phrase in the word, you need to ‘learn by other peoples mistakes’

We can all see the mistakes that have been made; I see them every week in work! If we can teach the children about finances instead of a magical man that lives in the sky, this country would be in a better position in 20 years.

A whole subject syllabus - really? When do you start, because you need pretty good maths before you start looking at compound interest rates (and I believe the applied use of those is already in the Maths syllabus)

I really don't see that this is a massive subject area -

1. You borrow some money

2. You have to pay it back

3. It costs you money to borrow money

4. It costs you lots and lots of money and hassle if you don't pay it back

(oh, but by the way borrowing money can actually be necessary and sometimes can even be a good thing to do)

There is room for it in the citizenship stuff, alongside the gamble responsibly, drink sensibly

I really do believe we need to learn our own lessons, and not be papmpered through this sort of stuff

Agree that this should be taught in schools - maybe not an entire subject (what would you even call that?!) but at least a few lessons where things like credit cards, loans, payday loans, bank accounts, interest rates and all the lovely jubbly things that would be helpful to know about.

When I was 18, it would have been nice to have had some information on the fact that a) credit cards were not free money and b) whatever you spaff on them has to be paid back, usually with interest.

May not make everyone more sensible (in fact definitely wont) but it might cut back on it all.

 

There is far more to Finance than learning about interest rates etc. Borrowing money is essential and sometimes vital, obviously, but understanding business and finance is just as essential. It’s not the same as ‘gambling’ or ‘drinking’ because not everyone does that, but when you start work you get paid and some people struggle with managing their money. I hear of horror stories all the time about people getting there house took of them because of car loan etc.

It’s shocking and should be brought in at school level no question, the pros far far out way the cons. People will start to understand the vale and meaning of money more, and financial implication of the ‘if’s and ‘what next’. I read a survey that said a lot of the public thought the best way to solve the financial crisis was to just print more money and hand it out! If they understand the mechanics of finance they wouldn’t think this. Just look at what 'learning our own lesson' has currently caused in the economy.

Its far more important than making a bird house in woodwork or playing Tennis all day in P.E

 

Don't get me wrong, I know that it is massively important, I am just not sure that the national curriculum is the place to put the education.

You see it is a more important part of teaching than PE or woodwork, but once you start down that sort of route you will start putting First Aid down, and all sorts of stuff called for by lobby groups. (PS I am glad I didn't go to the school that you are proposing)

Not everyone borrows money by the way!

Why not start by giving the training to those who are delivering the advice on lending money

Those that advise on investing your savings come under a huge amount of regulation and have to be well trained - as soon as you borrow money, a few clicks and we are done.

I am doing quite a lot of reading on the credit crunch, and what is blatantly obvious is that those that were involved in managing the risk didn't really know what they were doing either - why don't we start there?

 

Lots of great points on this thread. I agree that the majority of teenagers would more than likely sit in the classroom and not pay any attention, or forget it as soon as it's over. Especially because there is no exam.

I actually believe you could start this with younger children. It's not just a case of giving information to people to improve their knowledge. It's about developing the correct attitude in the first place. All the adults who over-borrowed would have been made aware of the repayments and also the total amount due. It didn't stop them borrowing though.

I have two young children in primary school at the moment. They have been taught since nursery about the importance of eating 5 portions of fruit and vegetables a day. If I am brushing my teeth in the bathroom, my daughter will come in and turn off the tap. The lessons my daughters have been taught in school form part of their attitude to life. They both want to be healthy and will panic if they haven't had 5 portions of fruit and veg. The examples I have given are 2 of a large number of different lessons they have taken on board from a young age. It was easy for the school to teach them those good habits because they weren't fighting against bad habits already formed. There are ways to make the subject interesting and fun whilst still getting the message across. Children at that age are like sponges and absorb huge amounts of information on a daily basis

Since I first contributed to this thread I have been having a serious look at the potential of evolving the information surgeries I have held into a business. I believe there may be some mileage in it, so I'd like to thank those who contributed. Another reason why I love 4N

 

it has started with banks already, days of 125% mortgages and banks handing out unprotected loans will nilly are way gone. If this subject is offered as an option to lean how many children will take that option up when they could choose P.E or something instead? how many children would say their best subject is maths? im 2 years into a degree in PPE and just done a year on economics, its actually  interesting and very eye opening!

If we give children the option to learn this or not, we will be in the same position 20 years. This must be made mandatory in all schools for children 13 and over. I don’t see why an economic GCSE can’t be mandatory alongside Maths etc. when i was in school a language was mandatory, surely this is far more important.

For me, the answer lies in the "good old days". This isn't a send them up the chimneys rant. I got my first job at 8 years old, working on a week end milk round for a couple of hours. I then went on to a paper round and worked in a shop at weekends. Since then I have always worked with the exception of a six week period between countries. I remember when I saved up to purchase my first camera, my first bike, my first guitar and so on. I learnt about the reality of money and the need to save and spend rather than the reverse.

At school, I was in a "special" class for problem kids. The stated aim being to keep you child free until the time is right and to keep you out of jail. Oddly enough, the focus was on real life and that included work, budgeting, making ends meet and so on. Lots of stuff that made self employment seem quite natural to me.

A good few years down the line, I was an advisor at a Young Enterprise group at the local High School where the reality of business was experienced.

I feel that this vitally important subject is best learnt by doing rather than theory. How you change the clock back and get youngsters working for pocket money rathen than relying on mum and dad, I don't know. Maybe Tesco should employ 12 year olds for a few hours a week and learn how to become responsible and the link between effort and reward.

Gary

Taking things down a slightly different route...

Assume for a minute that we agree that there should be such a course. Assume also that it would be targeted at children who are 16. With those two assumptions, what would be in the course? Let's nail down the outline that at least gives us the topic headings. The hgih level things that a studnet would be expected to know so they could 'pass' or graduate.

I will make a very intiial start.

1. Interest and why you have to pay when you borrow (rent) money.
2. Debt on its on is neither positive or negative. Some examples of how and when to use debt.
3. Saving - why is it important to save even if the savings rate is minimal.
4. How to plan (budget) so you financially end up where you want.
5. Why you will pay taxes and how to pay no more than your share.
6. What is a mortgage and why the borrower actually gives a mortgage to the bank to buy a house.
7. When buying a car, how to determine what it will really cost if you pay monthly

I think it is useful to say that most individuals do at some stage in their adult life borrow money and that not all types of borrowing is wrong. We have mortgages, car loans, student loans, home improvement loans, hire purchases, leases, etc, but it is important to know what we are committing to. There is too much focus on what the individual has to find to pay at the end of each month without reading the small print to find out how is the figure arrived at. For example what is the rate of interest, what happens if a payment or two is missed, what happens if you settle early, etc. one of the ways of borrowing that I am personally allergic to is the 'Buy Now Pay Later' schemes. The sales assistant usually says, 'you don't have to pay anything for a year!'. My response is usually 'and after a year??'. Their response: 'you either pay whole amount or you convert it into a loan'. 'At what rate?', I ask. Without fail the assistant does not even know and has to look it up to say at some ridiculous rate of say 28%! These are few matters that the public does not ask or bother about - people don't ask questions. Parents don't, kids follow same steps and so the story goes on ...