Cost of Living Crisis -Teaching Pupils about Money

The cost-of-living crisis has profoundly shaken our confidence in our ability to manage our finances well. As adults we are all on a steep learning curve educating ourselves about the best ways to cope with mortgage rates, credit card bills and even simple daily shopping. Logically therefore we need to equip our young people too, so they can better understand and survive in this new reality. Perhaps we should look on this new challenge as a wake up call for us all. It has made us look again at our “entitled” mindset and the lifestyle choices we make without properly factoring in the cost. If we are honest, we have probably unconsciously passed these values on to the next generation and we now have an opportunity for all of us, young and old to reset attitudes and behaviours around spending and the value of money.

Back in 2012 a National Childrens Bureau research project commissioned by the Personal Finance Education Group (PFEG) survey found that 96% of children questioned worry about money even then and that they wanted financial education lessons in school. In this new financial world of 2023 it has certainly become a new “must do” for schools.

Children 'worried about money' and want finance lessons - BBC News

Many of the large banks offer schemes to help educate young people about money. Andrew Bailey, Governor of the Bank of England for example, speaking in 2020 said that the current economic situation has demonstrated the importance of financial education. He warned however, that research shows how much further we still have to go to embed it into the lives of young people. The Bank of England Money and Me resource, developed in conjunction with Beano and Tes Global, aims to fill that gap and support primary school teachers to engage pupils in these vital issues from an early age. This initiativeintroduces younger children to what banks are and how they make money and issues like why prices change over time because of supply and demand. It looks, for example, at why money is so important and why money decisions and their impact on us matter. Particular topics include teaching the children how to budget successfully, debt in all its forms and keeping money safe by avoiding scams. The Money and Me programme is linked to the English, Northern Irish, Scottish and Welsh curricula,

Learning about money and financial literacy needs jokes and games say children | Bank of England

National charities are also prioritising the issue. Our Money, Our Future, is an education toolkit but aimed more at teenagers and developed by young people themselves  to help children campaign for personal finance education to be taught in their school.

A group of 12 young people from across the UK from the National Childrens Bureau personal financial education advisory group made their case for financial education in schools directly to MPs at a launch event in Parliament some years ago.

Conservative MP Justin Tomlinson, who chaired the All- Party Parliamentary Group on Financial Education for Young People, said at the launch;

 "Personal finance education has never been more important and I am delighted that young people will now have the tools to enable them to launch their own local campaign for this vital life skill to be taught in their school.

"The fact that this toolkit has been developed by young people themselves shows that they can make a real difference - and I am confident that we will soon be seeing the results of their ideas in schools up and down the country."

John Bateman, 15, from Young NCB, said: "It is so important that we are taught at school to look after our finances so that we can manage our money effectively as we enter adulthood, and as teenagers spend wisely”.

Money Helper is a free website set up by The Money and Pensions Service (MaPS) which is an arm’s-length body sponsored by the Department for Work and Pensions, which was established at the beginning of 2019. As well as offering free advice to adults as well as young people also engage with HM Treasury on policy matters relating to financial capability and debt advice. They have excellent advice on practical ways to help educate young people about all things financial.

They stress that it’s important for teenagers to recognise the value of money and understand that it’s not an unlimited resource. This may be the most important thing that we should get across in these difficult times.

So what can parents and teachers do?

The best approach seems to be giving teenagers the freedom to manage their own budget which will teach them two valuable lessons: namely only to spend what you can afford and avoiding the pitfalls of unplanned expenses

Money Helper also offers some sound ideas to help teenagers get in the budgeting habit:

Finding a free budgeting app which actually make budgeting fun by tracking goals and progress. Gamification (using gaming elements for real-world tasks) might work really well with the age group too.

Encouraging them to save by setting up a savings challenge, perhaps related to something they really want, and they’ll have to budget to succeed.

The old fashioned, but still really effective moneybox approach. Give them three jars for weekly pocket money and help them divide their money into three categories: ie needs (for example, lunch at school); wants (such as driving lessons); and a rainy day fund.

How to teach teenagers about money | Money Helper

The advice sites point out that teenagers who are encouraged to be responsible for paying for unexpected expenses themselves (rather than asking their parents for the money) are much more likely to keep track of their money. The bottom line however is that parents have to set boundaries with the money you give them and not bail them out if they overspend. The overall aim of this approach is that it is better for young people to learn the hard way now, while the amounts are small, rather than later when overspending can lead to problem debt.