According to a 2018 study by The Independent, three-quarters of Brits are worried about their financial situation. Many people find themselves living payday to payday, or stressing out over unexpected bills. Our mental health is suffering as a result. Education really is key here, as many young people have expressed dissatisfaction with their schooling in financial literacy. Here, liquidation specialists Business Rescue Expert take a look at how we can improve the situation and why money matters should be taught from a young age.
The generation gap
Countless studies have concluded that when it comes to money, there is a clear generational gap. Millennial spending habits signify the disparity of their knowledge and attitude towards budgeting. For example, research finds that 60% of these young people say they are willing to spend more than £3.11 on a single cup of coffee compared to 29% of baby boomers.
A lack of financial literacy in education has undoubtedly played a role in this. Many young people think that simply earning a lot of money means that you’ll never be in any debt. For some, there’s a general unwillingness when it comes to making sacrifices for the sake of budgeting. One survey found that 42% of teenagers say they want their parents to talk more about finances. Also, a staggeringly low 32% say they know how credit card fees and interest works. Teenage years are pivotal points for learning, so why is financial literacy being left out?
Teaching finance requires practical, real-world examples. Lessons in finance differ from core subjects like English and Science, as they provide life skills. Without them, it holds back kids as they enter adult life. One UK primary school created its own bank, to combat ‘below average’ financial literacy learning.
Despite financial literacy being introduced to the national curriculum in England in 2014, not everyone believes that school is the place for financial education. Some believe the duty should be on parents to teach their children the real value of money and how to approach it. It’s worth noting that in private schools, faith schools, and academies, it isn’t a compulsory part of the curriculum, so many youngsters would still miss out on these lessons. A lot of schools who do incorporate it into the school day compartmentalize it into general ‘citizenship’ lessons (and that depends on how much it is emphasised).
Financial literacy going forward
The current school curriculum does cover some financial areas such as pensions and mortgages. It’s still a relatively recent introduction to schools, so not all teachers may feel confident in teaching it yet, due to the specialised, complex nature of the topics. There is also the matter of religious differences in the approach to and teaching of these finance lessons. Followers of the Islamic faith cannot use any form of compound interest. This relates to things like conventional mortgages, student loans, and car loans, all of which are commonplace in many other cultures.
The question of how to implement financial literacy on a global scale is a tough one. Maths might seem like an obvious place to drop lessons of finance in amongst existing content. However, a debate is rife as to whether subjects like trigonometry are still deserving of a place on exam papers when finance lessons could take their place and provide longer-lasting life skills.
While there are certainly gaps regarding finance lessons, they could become popular in the future. These skills will prove invaluable for youngsters as they progress through life. They could eventually counteract the stereotype of financially irresponsible or illiterate millennials.
What’s your view?
Thanks for this post go to our friends at liquidation specialists, Business Rescue Expert.