My daughter Rachel is starting secondary school this September and a couple of weeks ago I was going down through the list of subjects with her that she is going to be covering right up until her Junior Certificate.
Exciting times ahead for a 12-year-old and it brought back great memories for me when I was telling her about when I went to “the Comp” for the first time and all the great friends I made, the new subjects, not having one teacher but seven or eight and so on.
Of course a big bugbear of mine is that of all the great subjects Rachel is going to be taught, there is one glaring omission and it’s a topic I have spoken and written about many times, and is that of financial education.
For me this is a no brainer. I don’t just think it is important we teach our kids about money, it’s absolutely vital for them and for our economy as a whole.
In the UK, financial education will become part of the secondary school curriculum from September 2014. They are forward thinking enough to recognise that young people’s lives are much more complex than they used to be, because they have far more choices, lots of financial products to choose from and they are being exposed to all of this at a much younger age.
So, it has never been more important that they are given the tools, confidence and know-how so they can exit school feeling they are in control of their money.
So, what happens to people who don’t get any financial education at home or in school, who go through our educational system and on to University and to those who do? Let me tell you what I have found. A person who graduates from university with a degree but has little financial education will often fall far behind a person who is financially educated, with or without a college education.
I have met many college graduates who leave university deeply in debt from personal loans. What then happens is that many of these graduates are so anxious to get a job that when they do? They get into even deeper into debt.
That is the price of having a good education but no basic financial education. A high paying job without financial education often means the person gets deeper in debt faster than someone with a low paying job but who is financially more intelligent.
Our personal debt is at record levels and if we don’t teach our children about money and how it works will they become just like some of their parents who are up to their eyes in debt and negative equity. Do we want that to happen to them? Of course we don’t.
For me the single biggest financial issue that Rachel and her peers growing up today will face is debt, no question about it.
We know the impact this has had on people’s lives and how a very large percentage of people attribute their lack of financial education/knowledge as a major contributing factor that led to their financial problems.
We need to go back to basics and teach our kids the importance of valuing and appreciating money, and show them how to manage it, and not be brought up in a society where they think it is OK to buy now and pay later.
I actually met our current Minister for Education before the last general election and spoke to him in detail about the importance of teaching our kids about money and how and why it should be introduced into the curriculum.
I was obviously disappointed that he was unable to act upon my advice when he did become Minister of Education. I was advised by his department some months after he took up office that financial matters are covered in other subject’s in the curriculum but, you know, for me that is not good enough.
At the moment, schools in Scotland, Wales and Northern Ireland, are being taught personal finance as a stand-alone subject.
Schools on this island are enabling their students to become financially savy on a day to day basis and helping them become better prepared for their financial future; these students just happen to live in the six counties.
They are being taught a subject that they can relate to and use right now such as budgeting, the difference between needs and wants, credit and debt, savings, consumer rights, comparison shopping, taxes and wages and how financial decisions can affect your life.
This is what we need to teach our own children because if we don’t we are failing Rachel and her generation by not investing in their financial education.
There are others who share in my belief in the importance of increasing our children’s awareness and knowledge of dealing with money issues and understanding how it works.
Alan Greenspan, ex-chairman of the Federal Reserve in the US remarked in a speech in September 2003: “Children and teenagers should begin learning basic financial skills as early as possible. Indeed, improving basic financial education can help prevent students from making poor decisions later, when they are young adults that can take years to overcome.”
Back in 2007, the then UK Treasury Minister Kitty Ussher said: “Financial understanding is a key life skill. Children need to understand the value of money and how to interact with financial service providers to provide for their own future”
So, I will continue my efforts with the powers that be, and hopefully one day, in the not too distant future, I will be sitting down with my now five-year-old Sarah, asking her what she learnt about money in school today.