In the UK, financial education begins 11, but new research from icount reveals that British kids should be learning the value of money from age 5. This financial education programme has only been introduced into schools since 2014 and aims to equip young people with the knowledge, skills and confidence to manage their money well.
Why children need financial education
For young people with an inability to manage their money, it means there can be serious consequences. These bad habits can lead to bad money habits, can lead to falling in debt, being scammed and make poor decisions.
The majority of current UK adults have received no financial education. So this idea is designed to encourage children to make smarter financial decisions as they get older and have more money to manage.
Is it enough?
When it comes to building a financially capable population there is no better place to start than in the classroom, where the issue can be tackled at its root cause. However, by this point, children will have already developed their own money habits, or have perhaps opened a bank account
Furthermore, as the national curriculum is only compulsory for around half of schools; the rest are academies or free schools, therefore they don’t need to follow it. When you consider that nearly 25% of GCSE maths papers contain questions with a financial context, with words such as VAT and APR; terms children have never been educated about.
What you can do to help
Saving is almost an entirely alien concept to a young child because it introduces the idea of long term goals rather than short term gain. Children look to their parents for behavioural traits, and will normally only see how parents spend money
Involving your children in some of the financial decisions you make about money can have a profound effect on their financial behaviours in the future. Start with something small like the weekly shop and get them to make a budget, and then move on to a more complex decision.
Children are great with technology and using interactive online tools will help make saving and spending clear and visual for them. Children will only ever learn sound financial habits by being immersed in using money. Giving them an opportunity to do this for themselves, in a way that’s managed and with the support will mean they learn in the very best way.