Financial education was made compulsory in England through its incorporation into the school curriculum. While this was a step forward in improving financial education for children and school-leavers, the problem was far from resolved.
In 2016, The Money Charity found that 90% of schools had incorporated financial education into their teaching delivery programmes. While uptake figures are pleasing, the quality of the education delivered tells a different story.
When asked about the quality of financial education delivered in schools, 66% of teachers believed it was either somewhat or very ineffective. In fact, three out of five teachers said the curriculum change had no impact and worryingly, a third of teachers didn’t know financial education was on the curriculum. This is largely attributed to the subject’s inferior position amongst the wider curriculum and a lack of teacher training in place.
What is the impact of these financial education shortcomings? Research from The Money Advice Service has found that children aged 12 to 17 whose parents made their spending decisions for them were more likely to spend unnecessarily and have poorer money management skills.
With the need for strong financial education evident, parents and teachers need to do all they can to educate their children early about financial responsibility. Despite 80% of parents believing it is their responsibility to teach their children about finances, one in six don’t feel confident doing so. The following has been provided by stocks and shares ISA specialist, True Potential Investor to offer advice and guidance on educating children about money.
The Money Advice Service advises that by the age of seven, your child’s financial outlook will be decided. It’s important that you start talking to them about money and what it means early.
What a child wants and what a child needs are usually very different. Often, a child doesn’t understand the value or price of what they’re asking for.
You should try to educate your children on saving, as well as spending. If they start saving towards a games console or other item, encourage them to budget with the money they have. This is applicable whatever the age of your child, whether they’re dealing with pocket money or wages from their first job.
As they move to college and university and become more financially responsible, it’s crucial that, as a parent, you prepare them the best way you can:
Evidently, educating your children around financial responsibility is important from a young age and one of the best ways of doing so is leading by example. True Potential Investor’s parent company, True Potential LLP, has partnered with the Open University to establish the True Potential Centre for the Public Understanding of Finance, establishing three free personal finance courses to help improve financial confidence across the UK. More information can be found here.