Tuesday 24 October 2023
Invest, save or spend? Cash or crypto? Stick to the budget.. or 'live for the moment'? In a cost of living crisis, managing money has never seemed more bewildering. But what to teach our kids...and when?
That's what I'm challenged to think about in the 'Money Matters' talk at the Ilkley Literature Festival this weekend. The engaging speakers, from the Bank of England and the Financial Times, know their stuff and breathe life into what could have been a very dry hour.
Both are passionate about having financial education on the school curricula, which I am happy to report is already in place, usually delivered during personal development lessons. And there are some terrific projects in place to support educators; at my place of work, these have been so popular that annual feedback from pupils consistently asks for more input in this area.
The growth of creative ideas to interest pupils in thinking about economics has been most welcome. Rishi Sunak may think that school is the place enable teenagers to "feel confident" with .... things like mortgage deals. More experienced teachers however, who in previous years were tasked with dragging a room of 14 year-olds through a grim hour of 'fixed rate' or 'interest only' deals for first time buyers, would argue that this suggestion misses the most valuable lesson of all. If you want school children to listen... make it relevant!
And the financial gurus in Ilkey chime fervently with this. Of course, teach about saving and borrowing; with money in short supply, the temptation to 'buy now and pay later' is a real danger for young people. But (and it is a big BUT) do it in relation to something that pupils are interested in. As an example, the experts addressing the Ilkey gathering, tell us that, for one teacher in Wales this was Hair Extensions; Nicola Buter's innovate lesson, addressing the complex world of finance, loans and interest, winning her the Interactive Investor Personal Finance Teacher of the Year Award.
Nicola Butler: winner of Interactive Investor Personal Finance Teacher of the Year Award 2021
And quick google search will take you to a wealth of advice on financial guidance for toddlers and teenagers. Of course Martin Lewis is there. As early as 2007, his Teen Cash Class, a resource for parents and teachers, promoted the use of key mantras when working with young people on breaking the 'impulse buying cycle'. To be honest it is useful for anyone! When contemplating a spur of the moment buy, ask yourself,
Do I need it?
Can I afford it?
Can I get it cheaper somewhere else
The conclusion to this particular chapter is particularly thought-provoking and I'll certainly be both internalising it ... as well as sharing it with my offspring,
'If I were able to give you back all the money you've ever spent buying things on impulse,
would you take the cash and hand over the stuff?'
As much spending has now migrated online, Lewis' site now promotes the free guide from the not-for-profit internet safety body Internet Matters, Online money management tips to support young people.
There is guidance for younger children too. For most primary-school aged pupils, finance means small amounts of pocket money and learning to understand and value this. Barclays Bank, as one example, have designed a nice set of pocket money activities called 'How to teach your child about money' and there are many others.
So engaging, fun and time-relevant for our children? There is a snag however ... at some point, many will have to grapple with mortages, debts, pensions and bills. Some may be in a position to think of investments too. So when do we teach them about this? And, being honest, how many of us would actually feel equipped to do so?
Without relevance, finance can be a huge bore and so any advice is best received when it is needed. Hence, in many situations, that means after leaving school. So who do adults turn to?
I suppose we could read books, try to wade through the financial newspapers and, of course, tune into Martin Lewis. However, as a society can we do better than this? Commentators are ever-ready to give schools the mission of providing education on any imaginable societal issue. Would it not then be fair, on this most grown-up of issues to ask FE/HE providers and employers to don the mantel of educators too?
Should companies be required to deliver impartial training on pensions for all new employees? Prior to applying for a home-loan, could potential first time buyers be mandated complete a free course designed by the lenders, on managing a mortgage and look at tips such as 'over-payment' to reduce the debt? How much guidance to universities give students on living on a student loan? Should we ask the DWP to design lessons on 'surviving on benefits' or 'escaping the poverty trap'? And who can advise us on whether to save or invest?
Questions questions questions! I set out in this this post thinking about what and when to tell our kids about money matters. Isn't the truth that in an ever-changing world, our leaders also need to think about what and when to tell all of us, at certain stages of life, about this most important of areas. To reduce stress, improve quality of life and contribute to a more prosperous society... wouldn't that be a win for everyone?
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