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Children should be taught personal finance at school
Former Member
Posts: 1,876,323 The Mix Honorary Guru
Do you think children should be taught about personal finance and budgeting at school? I can't find a link but saw something on the news about MPs saying all schools should teach it.
I never learned anything about bank accounts, mortgages, credit cards, budgetting at school. Plenty of useless algebra and trigonometry though!
I never learned anything about bank accounts, mortgages, credit cards, budgetting at school. Plenty of useless algebra and trigonometry though!
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Was well worth doing.
They do teach you a load of old tosh at school. I've been pretty lucky that budgetting and such has come naturally to me.. with a little help from having a brilliant business studies teacher at school who helped us out with some real life budgetting scenarios - whereas my other half never went to university, had a pretty good job (18k a year) and still ended up a grand or so in debt - and had nothing to show for it :eek: yet I had a pretty naff paying job, a car, and a mini zoo of animals, and a fair few grand in savings accounts. They definately need to teach kids about real life at schools!
I think that it should absolutely be taught at schools. Not just budgeting, but loan and credit card comparisons, information about the RPI, APR explanations, renting and getting mortgages, taxes and tax free savings, choosing bank accounts not based upon their free gifts, pensions, ISAs... the list goes on, and it's all stuff that we have to deal with on a day-to-day basis.
From all the times I read about people on here going overdrawn, I had no idea what a popular thing it was to do, I'd say it should definatly be something that is taught if so few get it.
Sara's got the idea. They should teach more than the basics also. It would by far be the most usefull class. So few people seem to know so little (me included
It really scares me how little I know about things like this. For example, I still have the bank account with HSBC that we were made to set up at school, and I still have a solo card because HSBC don't think I have enough ID to prove that I am real. I have no overdraft and the only debt I have is my student loan.
I think if people were better educated about financial things then there would be less people in debt etc. (But also GWST would be out of a job!)
If anything such classes should be extra to other classes, not instead of academic stuff.
Maybe there could be an effort to use more finance examples in maths classes so that people fully understand compound interest etc but you can't tech common sense.
Teaching people personal finance isn't going to stop large numbers of morons getting into unsustainable debts......
and Algebra and trigonometry is not 'useless'
For anyone who doesn't feel that they know enough about finance, this book is fantastic:
http://www.amazon.co.uk/Love-Not-Enough-Womans-Keeping/dp/0007235186
It's written by the editor of MoneyWeek, and while it is aimed at women the advice in it is really very sound. My mum bought me a copy and it's brilliant, so accessable as well, it's not all financial jargon.
I think it would be a good idea too teach youngsters about personal finance, but some people (like me) dont listen until the damage is done. :thumb:
Lifes too short
I'm going to disclose now something that I've kept away from TheSite for several months. As many of you will be aware, last year, I made a choice to leave university. Due to a cock-up on my part, my student bank account with NatWest was shut just days before I was due to leave for Bristol. The bank account was very old, and hadn't been used for a long time. I should have spotted this error, but completely missed it. NatWest were unable to open a new bank account for me, because I couldn't prove my identity sufficiently.
According to the bank manager, if you are aged 18 or over, the only forms of ID that banks will normally accept is either a valid passport or a full driver's licence. Provisionals are no longer accepted for anyone 18 and upwards. The reason is a fraud scandal was discovered last year in which bank accounts were being obtained via fake provisional licences. The bank is not to blame for all these things - legally, they are obliged to check people's identities in line with laws and regulations against money laundering.
I then went back to HSBC, whom I hold a savings account with. They refused to open an account for exactly the same reason. That meant I was stuck with an account that was completely insufficient for my needs. I am unable to set up direct debits, write cheques, pay via card in a shop, or pay via card anywhere else. Neither do I have an overdraft facility. That is not a situation I was prepared to tolerate as a student.
I decided to learn to drive, as I thought a full licence would be more use to me in the long run than a passport. Having now passed my test, once I have the pink licence, I'll soon be able to open a new bank account at long last. I've found HSBC to be completely unhelpful. I've had an account with them for nearly four years now, and the one time I needed their help, they tell me to get lost. Hence why I'll soon be giving them the same message by taking my custom elsewhere.
The clients who come to me for help are rarely spoilt, but they do have a lack of understanding of financial matters, and lenders exploit their lack of financial literacy to a shocking degree. Most people still think that if a bank will lend them money it means that they can afford to repay it. Most people have faith in their bank, and they remain loyal to their bank through thick and thin, and they can't understand why the bank doesn't show them the same loyalty. Even when I tell people that the bank can, and will, seize money from their bank account to pay money owed to it, they still make excuses about why they can't/won't/shouldn't change accounts.
Ballerina, I think you should listen to some of the calls I take at work each day- then you might learn a little bit of tact and diplomacy. People do enter debt because they are not careful enough, of course they do, but it is hard to be careful when you don't actually understand what you are doing. Teaching people basic life skills is EXACTLY what the school is for, and whilst parents have a role, if the parents don't understand the process what hope have their children got?
People have all sorts of stereotypes about what people in debt are like, and I think that working in a debt advice setting would open their eyes quite a lot. Because, believe it or not, people in debt are no different to those who are not in debt- its often just bad luck that means they can't cope.
It amazes me constantly, though, how the Government slags off the "debt culture" we have when its own policies puts most school leavers in £20,000 worth of debt before they even get their first proper job. It's no wonder that personal borrowing has gone through the roof- you have to borrow to survive.
We're both debt counsellors and we're still paying off our university debts, and I graduated nearly three years ago now.
If they didn't do the check, or missed one out to be helpful, and you were a fraudster, the bank staff member could be sent to prison for up to five years. The bank wouldn't be punished, the staff member would be.
Remember that when you're slagging them off- most of them would love to help, but don't want five years porridge because of it.
What's most of a pain is when you still live at home and therefore don't have any address ID because everything is in the name of your parents! Or, you don't claim benefits or you aren't an immigrant so you don't have anything to prove who you are except a birth certificate and a provisional licence - neither of which are accepted if you are under 18.
Kermit, that's exactly what I meant. I can't remember if I tried to explain it or just didn't bother, but people don't know about financial things and get exploited by money lenders because of it. And I doubt I'll ever pay off my student loan!
I had this problem when changing my bank account and setting up a savings account. They accepted a driving license (which I don't have and never will do) or a passport and I don't own that either, but they don't accept a young person's travel card. This meant I had to get my dad to fill in a form giving them his details but none of mine.
Agreed
It's very easy to get into debt. I have a thing about credit cards/loans/buying things on interest. When I moved into my unfurnished flat, it would have been very easy for me to get a loan and buy everything I needed that way. Many people would do so. But I would rather go without certain things, eg an oven, a sofa, other things some people would consider essentials, than get into debt.
Is anyone in a position at the age of 11 to rule out all of these career options by opting not to study 'useless' maths?
In what way is history, or geography, or graphic design, woodwork, english literature, drame, music etc 'useful' in everyday life? Should we not be taught these things either?
People understanding how interest rates work won't stop them taking loans they don't need if they are stupid enough, and if they do need the loans they will obviously get them anyway.
I am all for offering some basi advice at school, but wouldn't expect many people to heed it, see sex education for the success of trying to instill 'better' behavious in many people........
I don't think the point was to not study 'useless' maths, just to add in another aspect to it - very much applied maths, for use in real life.
I disagree. Look at the number of people on these money programmes who are shocked at the fact that they're paying £600 a year on their loans in interest. I don't think a lot of people think about it to be honest, not over the long term anyway. It needs to be made more common knowledge.
Yes, see sex education. Our sex education appears to work better than the US sex education, in which abstinence only is preached.
It's not a quick fix, but surely everyone should be given the opportunity to learn about something which will very much affect their lives and future spending? The average person could save up to £1000 a year on what they spend on credit and utilities but because they're uninformed they don't bother looking around or changing. That's worth educating people about, surely?
How can people not know what they are paying in interest? Seems more a case of wilful ignorance than lack of education. I just doubt that being taught about finance at school will have a big impact on your behaviour in adult life.......
I've been friends with a number of people throughout my life who've been bad, and sometimes downright awful, with their money. They've all suffered to some degree with the instant gratification bug. They all seemed to suffer from the a divorced sense of what they earn against what they can spend, almost as if they feel they go to work five days a week so they should be able to buy whatever they want. They've also all been very vacant and vague when I've tried to reason with them about their spending and explain to them that the chances are if you're putting things on credit cards, then you can't afford it.
I certainly think educating people on the basics of budgeting would be a good idea, but I also get the sense that people in debt often don't really feel that they need to take personal responsibility for their debt and spending. I find it hard to understand how someone can not grasp that if they earn £100 then they can only - if they're being sensible - spend £100.