A few days ago I read an opinion piece in the FT (non-paywall copy here) saying that there's no point teaching school children about money. We should just force-feed them more maths instead. This made me quite angry for a number of reasons.
Managing money is a vital life skill - just like maths. But to say it's better to teach our children even more 'straight' maths, a subject that will never be top of everyone's favourite lesson list, rather than take up a small slot in the curriculum to show them the practical real-world application of maths and the consequences of good and bad money management is, quite frankly, ridiculous.
But first, I should probably disclose my vested interest. I'm the chief executive of Young Enterprise, a charity that works with schools, colleges and universities to get young people excited about and improve their knowledge of business, and help create successful, creative young entrepreneurs and skilled employees of tomorrow. We've also just joined forces with the Personal Finance Education Group (pfeg), the UK's leading financial education charity. So I do have an axe to grind on this subject and I have the knowledge and experience to do just that!
When I was at school, and in fact when the vast majority of us were at school, the only exposure to financial education we got was deciding how many sweets from the penny tray we could afford with our pocket money on the way home. When I left school, I can honestly say that I knew next to nothing about bank accounts, insurance, credit, debt, saving, mortgages, pensions or anything else. I certainly didn't understand the way interest was calculated on credit or on a loan. I had, like most of us, to learn the hard way about how to manage my money; not always with successful results.
I know that any education about the mysterious world of money would have been gratefully received. For a start, it would have made maths lessons a whole lot more interesting - and a great deal more meaningful. Personal finance and money management is, after all, maths in action.
Do we really think that keeping children and young people in the dark about money management is a good thing to do? These days, children and young people need a good understanding of money because the world has changed drastically and will continue to do so at a rapid pace. Children as young as seven start using their parents' credit cards to shop online and buy smartphone apps with their pocket money. Older children work part-time or want to follow-up their new business ideas. Teenagers have decisions to make about the costs and benefits of higher education versus going straight into work or starting a business instead. They need to know the difference between a pay-as-you-go phone and one on a contract. The list is endless. All those things we adults now take for granted, we learned for ourselves by trial and error and I don't think that future generations should have to make the same money mistakes as we did.
Evidence from across the world shows that young people who have had access to financial education in school are more likely to save, be more confident with money and be able to spot the hidden charges contained within seemingly attractive deals and contracts.
From now onwards there is a statutory requirement for maintained schools in England to teach financial education in mathematics and citizenship, making it part of the curriculum in the four countries across the UK for the first time. I, for one, think we have done the right thing. We have potentially empowered future generations of adults; giving them the confidence to make informed decisions about their money and their lives. Just by explaining what money management is all about; giving them the confidence to ask the right questions and introducing them to the difficult choices we all have to make, we are giving children some of the most valuable information they will ever want, or need.
Let's stop bashing innovation in the classroom. Let's get behind personal finance education and give students the opportunity to create a sound financial future for themselves. This is the way you effect sustainable, long-term change, through the education system - because prevention is always better than cure.