/ Money, Parenting

Financial education should be compulsory in schools

Child doing maths on blackboard

If we were taught about money from an early age, we could face the banks on an equal footing when we get older. So why don’t schools put personal finance on the curriculum?

The three Rs have always been the bedrock of a solid education.

However, with the threat of a double-dip recession looming and millions of us in debt, surely now is the time to add a P and an F to those Rs and start teaching personal finance at school.

In the past month, two separate pieces of research have shown that not only do many of us think personal finance is too complex, but the vast majority of us want to see it as a subject on the curriculum.

A report from financial advice charity the Money Advice Trust revealed that only 38% of respondents were confident in taking financial decisions. Meanwhile, another survey stated that 71% say a lack of basic personal finance understanding is to blame for debt.

Personal finance can be complex

Why do we take it for granted that people know that spending what they don’t have will ultimately catch up with them? If everyone knew that – and stuck to it – none of us would be in debt.

From interest rates to exit fees and structured products to with-profits funds, the world of money isn’t simple. Financial education in schools would create a mentality of questioning which would lead to consumers making more capable decisions about their money.

Children need financial confidence

If children were taught early enough that money doesn’t grow on trees and that it doesn’t belong inside a china pig, then banks and building societies would have to treat their customers as equals.

Indeed, banks may see financial education as advantageous, as more financially-literate consumers may well buy more products more confidently. I think that’s what you call a ‘win-win’ situation.

So when your six-year-old comes home talking about investment banks rather than In The Night Garden or learns their ABC at the same time as the FTSE, don’t be alarmed, be impressed.


I used to teach Everyday Maths at school which was exactly what this topic is about – but this was designed for the lower ability sets. in secondary School. If you really want a six year old to comprehend the Financial world you have little comprehension how complex it is – or the level of mathematical sophistication that is needed to comprehend it.

When the emphasis was changed to the more academic qualifications because Business and Commerce said they wanted graduates the syllabus was dropped. We now have 50% graduates – but Business and Commerce don’t have jobs for them – So why bother?

pickle says:
21 October 2010

I don’t think you need to teach six year olds complex finance – but they should know about spending and saving – simple finance….so they understand the meaning of money in the everyday world. Keep the complex finance for the sixth form.

Agreed – but that wasn’t what Nick stated.

I always used simple spending and saving examples to teach six year olds – The vast majority of people understand the concept – But not necessarily the FTSE index – and if you never invest in shares you don’t need to know – If you do need to invest you have the necessary skills to cope.

The problem was due to Banks and Building Societies making it far too easy to borrow amounts of money completely outside the borrowers capability. The vast majority of borrowers do not consider the risks if offered the money by an irresponsible Banks – The Banks and BS do but they loaned anyway – and went broke.

The message is – Bankers are irresponsible – not that six year olds need to be taught “Finance” concepts.- Governments need to control Banks more – and there is no sign of it yet.

Sophie Gilbert says:
22 October 2010

There was a time when being in debt was a stigma and the only big purchase you’d allow yourself to borrow money for was a house, and then maybe a car, if budget allowed. Now people borrow to buy a new livingroom suite they don’t need (in time for Christmas!) or a new telly or a new computer, and so on and so forth. It should be made illegal for anyone to lend more than applicants can afford, to save them from themselves and their own naivety/stupidity in the first instance, and secondly to save us all from greedy, irresponsible lenders. But do let’s teach basic personal finance to kids, the ultimate messages being, don’t spend more than you earn and more possessions won’t make you happier.

In some ways – I have to disagree, Hire Purchase or “Never Never” was always looked as a useful method of buying – As was “The Catatogue” . The real difference is the amount of money spent – buying say a coat from a weekly catalogue for £10 over two years was an effective way to “buy and ride!” as it were.

The real problem many people face is the Banks and Building Societies positively encourage you to over-spend. Many people then think if the Bank says OK it must be OK.

Where do you suggest teachers fit in “personal finance” – The Maths Curriculum is already full of the information required to pass exams??? The reason why we could teach “personal finance” at our school was because most of the pupils were not taking higher examinations.