Developing children’s financial nous

28 Aug

The love of money is the root of much evil, but money, per se, makes the world go round.   Maslow would, in all probability, have placed money at the base of his triangle of human motivation – an essential for meeting physiological needs, which includes food, water, warmth and rest.  The best things in life may be free – such as the air we breathe, the songs of birds that we hear and the happiness emanating from the good life.  However, to appreciate these, human beings need food, water and creature comforts, which are not available unless humans have enough money.

It is sad, therefore, that in the United Kingdom, we have accumulated a national debt of £1.5 trillion – a debt that we will be expecting our children, grandchildren and future generations to pay back to the world.  And this debt can increase.

Schools/academies are suspect for not devoting sufficient time to teaching pupils/students how to manage money. Why else would so many, in a straw poll of 2,500 students between the ages of 11 and 16 carried out by The Times Educational Supplement (TES), list financial themes among the 100 things they would like to do before they finish their schooling such as “Learn what to do if you are in debt”, “Learn how to save money” and “Learn about taxes, mortgages and rent”.   In short, they are keen to learn how to survive (if not flourish) in the world of austerity that they will face.

Since 1 September 2012, young people wishing to study further (unless qualifying for maintenance grants), have to pay university fees to the tune of £9,000 annually.   The government is minded to give universities – such as those belonging to the Russell Group – free rein to increase this too provided that they can prove that their teaching is good to excellent.  If you then add the cost of living to the £27,000 that will accrue over three years, a student is saddled with a university debt of £35,000 over her/his lifetime unless the student relies on the Bank of Mum and Dad (BOMAD).  [The editor of the TES, Ann Mroz, proposed that if government is threatening to permit good universities to raise their fees, it should also penalise poor-quality universities by requiring them to lower theirs.]

So what can schools and academies do to prepare pupils to secure their good financial health when they move onto university/further education and thence to the world of work?   Martin Lewis, the money-saving expert who founded in 2003 for £100, which is now UK’s biggest money site explored by 15 million users monthly, said: “Much of what we do, for good or ill, is determined by finance. Teenagers aren’t stupid: they get that.”

He has suggested that money education be included as part of the curriculum. It could be a part of mathematics, but is more likely than not to be overlooked as teachers try to keep up with changes to the national curriculum and the syllabi of subjects for GCSEs and A Levels.  Besides, it could be possible that mathematics teachers may be less enamoured of teaching about money than teachers of other subjects such as history, modern language or even Physical Education.

In this country, we are often embarrassed talking money, teachers more so than most.   Very few professionals go into teaching because they expect to be rewarded with pots of gold for the effort they make.  They do so, mainly because of the intrinsic rewards they derive – (going back to Maslow) – for self-fulfilment – the top of the hierarchical pyramid of needs.   Consequently, they are ill-equipped to teach “money”.  However, we ignore this subject at our youngsters’ peril.

Young people (ill-advisedly), who are glued to their TV screens, are battered with viewing commercials that exhort them to “buy products” – which are aggressively marketed.  They need to be educated to become discerning consumers, accordingly, from an early age – rather than know only the price of everything and the value of nothing.  In short, they must (before the age of 16) become financially literate.

It is universally accepted that a lack of money is a major contributor to mental health.  Its absence is being increasingly felt by the younger members of our society.  Schools, therefore, could benefit from finding a way to equip youngsters with the tools to generate resources honestly, creatively and doggedly.

The action plan for schools that Lewis proposes to the TES is as follows.

(a)        Don’t underestimate pupils’ interest in finance.  It is potentially a way to increase engagement in mathematics.

(b)        Offer CPD (continuing professional development) sessions on financial education to all members of staff responsible for teaching the topic.

(c)        Find a staff member interested in taking charge of promoting the teaching of finance and appoint her/him as a “financial educational champion”.

(d)        Ensure that the “champion” provides for mathematics and citizenship teachers the appropriate resources to deliver financial education.

(e)        Ensure that the “champion” arranges for the mathematics teachers to coordinate their financial education lessons so that they complement the mathematics syllabus.

There are two unused resources in schools into which we can tap.

Firstly, we have a cadre of high-quality school business managers.   Anecdotal evidence suggests that they are very knowledgeable and skilful not only in balancing the books, but also securing good value for money, controlling expenditure and generating income.   Their expertise could be used to benefit the pupils.

Secondly, every governing body will have at least one governor who has financial expertise.  Every academy is required to have a “Responsible Governor” tasked with having oversight of the academy’s finances – i.e. that the budget is constructed sensibly with the academy living within its means and securing good value for money.  Some governing bodies have more than one.   HSBC is the second largest organisation in the country with school governors giving their time and expertise – gratis.  While it is not the role of a governor to teach pupils about finance, there is scope to enable such governors share experiences with pupils and alert them to financial issues that they will have to confront in adult life so that they operate responsibly.

Governors are expected to visit their schools/academies once (perhaps) every six months if not with greater frequency to have oversight of how their schools/academies are run during normal working days.   Is there a case for engaging the governors with financial expertise more actively and, with guidance, enabling them to share the “wealth” of their experiences with the pupils?    I do believe that it will not do the academies/schools any harm, but rather, be to their advantage if they do so.

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