Everyone needs to be able to manage their money, but for young people the inability to do so has serious consequences. For them, it is easier to fall into debt, be scammed, make uninformed decisions and establish bad money habits.
New research from icount shows that the majority of British adults think that children should learn the value of money from age 5; however, in the UK, financial education starts at age 11.
What is financial education?
Financial education is a programme of study that aims to equip young people with the knowledge, skills, and confidence to manage their money well.
The idea behind teaching financial education as part of the national curriculum is to encourage children to make smarter financial decisions as they get older and have more money to manage.
The majority of the UK’s adult population never received any money management lessons
Why do we need financial education?
The shift towards an increasingly cashless society, and more financial products and services than ever before, is making it harder for young people to navigate their personal finances and make good decisions where money is concerned.
Financial education became part of the national curriculum in September 2014 which means that every child since that date will have had some form of money management training.
Should we be teaching children about money sooner?
The new study from icount showed that just 10% of parents think that age 11 is early enough to learn the value of money. It does seem bizarre when you consider that nearly 25% of GCSE maths papers contain questions with a financial context, with words such as VAT and APR; terms children have never been educated about.
How can you teach your children about money?
As the national curriculum is only compulsory for around half of schools; the rest are academies or free schools, therefore they don’t need to follow it.
Involving your children in some of the decisions you make about money is one really easy way to help develop the right financial behaviours for the future. For example, you could sit them down and show them how you budget the weekly food shop and ask them to have a go.
Another great way is prepaid cards. Most children’s bank accounts come with a debit card, but the worry is that they can spend all of the money in the account. Prepaid cards let you load cash on them and spend anywhere credit or debit cards are accepted. They're good to get if you want to help teach teenagers how to spend responsibly. If you haven’t loaded money onto it, you can’t spend it, forming a safe barrier.