Posted by: nmarsh May 4th, 2018
Financial Education – Who’s responsibility?
This topic has caught my interest over the last few months. There have been several articles about Finance becoming part of the National Curriculum or arguments about who takes the responsibility of educating children about the financial world. This is a huge passion of mine and something I see value in investing time and energy in.
In our current Education system, we teach basic number skills and reading and writing from age 3, if not before. Children of this age absorb information at an incredible rate. Languages, for instance, become a part of the child, usually with considerable ease. I only need to spend a weekend with my niece Isabella, to know that she will grow up bilingual. Her mother, Sophia, speaks Spanish to her constantly and her father Matthew, my brother, speaks English. Being linguists, they speak to her and each other in many other languages - including Chinese. Isabella is only 6 months old, but she will be so immersed in languages, this skill will become part of who she is, most probably without any difficulty.
Here begins my discussion:
Why are we waiting so long to teach children about handling money?
Responsibility of the educator or the parent?
This is a question that has come to my attention in numerous ways on social media or in the news recently. There have been several arguments and heated discussions about how it should be left to the responsibility of parents to educate their own children about money. In theory, this should happen naturally, and what better way to learn, from your own role models. Providing these are good ones.
Children learn so much from watching things around them - how we shop, how we communicate, how we spend, how we save. Is this the only financial education they should receive or should this be partnered with basic handling money skills in a curriculum?
Of course, as a parent myself, we try to discuss and educate when we can. Only yesterday, I was explaining to my daughter Olivia, (3) that we could not buy something as it was too expensive. She went on to ask what that meant, which led to a terrific opportunity for learning. These moments don’t happen enough, or, our busy lives lead us to rush past this opportunity. To adults, this may seem obvious. We can’t buy it as it’s too expensive. Children need to be educated with what is ‘expensive’ and how this can be different for different people. How do they learn this? Through recognising earning, budgeting, saving and spending habits.
Why is this education either lacking or non-existent in schools?
Recently, I read an article from The Money Charity, explaining that Financial Education is being implemented in the curriculum in secondary schools. The link to this article is at the bottom of the page, I would recommend reading it as it contains some fascinating studies and staggering facts. I have reflected on the article in the following ways:
1. Box ticking
The government have dealt with something that was a problem. They can tick the box to say that Financial Education is now in schools. Next job. This does not appear to have been followed through adequately with the correct support and guidance from professionals. The evidence for this follows.
2. ‘Teachers are not confident in the quality of financial education’
We seem to have missed out the fact that there are generations who were not explicitly taught about money. Without adequate training and resources, how do we expect these teachers to educate the next generation, without providing training to them first. Teachers are not magicians – as discussed in my last blog! So much pressure is put on them to teach a huge array of different things – has it been forgotten that the teachers might need ‘teaching’ first?
3. Age 16 - 18 is too late
As discussed earlier, young children are so much more open to learning than they are when they reach teenage years. Teenagers have enough to think about without having to learn about how to handle money. This should already be a skill that should be embedded by this age. After all, it is a life skill - with 16/17 years of life under their belts, they should understand the importance of money. Some children are lucky enough to have had sufficient education through their upbringing, but let’s think about those who have not, and children who haven’t had good role models to look up to. This could have a negative effect on their own money habits growing up and then their own children’s money habits. We should stop this snowball effect as soon as we can before it loses control.
I will be clear about one thing. I am not suggesting that we teach 3-year olds about ISAs and Fixed interest securities. Perhaps that might be a better suggestion for them as a bed time story. Guaranteed a night of undisturbed sleep! However, since handling money is such a valuable life skill, something that everyone thinks and often worries about daily, why are we not spending more time embedding it at a young age, so when we grow up it does not become such a frightening prospect.
Having taught children from age 3 – 11 during my first career, I am confident that children at an early age, can be taught to earn, spend, save and budget. Some parents choose to do this with pocket money and tooth fairy contributions – but how many children receive a true education about what to do with this money. If children learn about earning, saving, spending and budgeting in school they will have an opportunity to use and apply these skills in a home setting. Therefore, embedding this knowledge from the very beginning.
Are we moving with the times?
As electronic payments become the norm – how are we educating children about this? I use contactless payments every day, even to me it doesn’t feel like ‘real’ money! The number of children who leave school misinterpreting the rules of a credit card and feel they have ‘free money’ only to end up with huge debts to pay off later in their life is staggering.
When I was teaching, the most I taught about money was coin recognition, adding coins together, receiving change. That was it. This is not the only way we need to think about how money is used. This is still a valuable skill to understand and needs to be taught, however, I feel the focus is not on ‘money’ here but instead problem solving and maths skills through different scenarios. There is no reason why more emphasis cannot be put on earning, budgeting, saving and spending in the curriculum to promote healthy financial habits. The ‘new’ curriculum, put into place in September 2014, prides itself on being a ‘skills based’ curriculum. My concern is the important life skill of handling money has been missed.
I have an idea of how this could be taught through schools. I believe it needs to be a priority. Parents and teachers need to work together to do this. Addressing it at teenage years is too late. Children need to be immersed in this knowledge, so it becomes a part of who they are. A positive and open education of handling money from an early age should lead to a clear and open understanding as adults. Thus, leading to healthy money habits, growing up to feel confident and in control of your own finances.
In conclusion, whose responsibility is financial education?
I believe each one of us holds a responsibility for educating the future generations. I also believe that since money and finance is such a huge part of everyone’s lives, carrying with it a huge array of emotions, it should be a large part of the curriculum in schools. With guidance and professional support, this can start from the moment they walk through the school door, for the very first time.
- Getting parents on your side – how to encourage positive financial habits in the homes where it lacks, promoting a healthy money outlook for the whole family.
- Filling in the holes – helping the financially un-educated gen X, Y and Z with huge financial decisions such as mortgages and debt handling.
- Financial Planning for the millennials and beyond – encouraging youngsters to seek financial advice and build a relationship with a planner from a young age taking them with them on their journey, supporting and advising though difficult financial decisions and situations.