If you woke up early this morning and turned on BBC Breakfast, you might have caught me on an outside broadcast at a school in Manchester with Steph McGovern. The topic of the day was teaching personal finance to primary school children. This is a brilliant idea in the eyes of Skinted Minted Mum, yet so far it’s not featured in the Key Stages. Why?
The obvious answer is that mortgages and pensions are too complicated and boring to teach to children. Most adults’ eyes glaze over when even the words are mentioned. But this ignores a very important point that everyone at primary school now will need to save for a pension and most of them will require a mortgage too. These are among the biggest financial decisions an individual will ever make but we're sending our kids into the adult world with the slimmest understanding of it all.
For a long time, I’ve thought that personal finance could be taught as “practical maths”. For example, if I have £100 in the bank earning 2% interest over 12 months, how much will I have by the end of the year? Or, more importantly, if I borrow £1,000 on an APR of 23%, how much will I owe Barclaycard by the time my pay cheque clears?
A recent survey by the Young Women’s Trust found that a quarter of 18 to 30 year olds are constantly in debt and almost half of this age group have to borrow to make their cash last until the end of the month. There are obviously many reasons for being in debt but could educating children from a young age about money help with budgeting and borrowing as they grow into adults? It has to be far more useful than being able to calculate the amount of degrees in the angles of a triangle, don’t you think?
Young Money, together with Martin Lewis of Money Saving Expert, has started an initiative to give the first-ever text book on personal finance to secondary schools for free. It’s a great plan and maybe in time it can be rolled out to primary schools too. Well done to the BBC too for highlighting this issue. And, of course, mums can help at home. One way to get kids up to speed is through money games and, for starters, Nationwide has some for you to try here. Happy learning!