Financial Education in Schools… or the Lack of.

Mr Fu and I are both in our late forties and seriously lament our late discovery of financial independence.  What hope did we have, though, considering our non-existent education in all things financial?

I worked in a bank for two years after college and that was my entire financial education.  Even then it was a pretty basic knowledge.  So much of ‘banking’ in the nineties was about selling loans and credit cards, to be honest.

On a personal level, our goals in our twenties were to get married (well mine was!), buy a house, go out lots, have nice cars, clothes and holidays….an endless list…. so it was a matter of getting a good enough job to afford all that.  We joined pension schemes and the like, but anything we couldn’t afford was put on a credit card (or student loan …. we had a three-week party holiday in Faliraki on our student loans one year!  What a month that was!)  But we were actually financially ignorant.  Our parents were pleased we had better jobs and prospects than they had had, and made sure we were reasonably sensible with our money but they knew little more than we did, truth be told.  Both sets of parents were hard-working individuals who wanted the best they could afford for their families and encouraged us to do the same.  It’s only all these years later we have found a better path.

The youth of today are luckier, though, aren’t they?  From September 2014, financial education became part of the secondary school curriculum in England, so modern youngsters have the privilege of a great financial education at school, right?

WRONG.

The addition of financial education to the curriculum was the result of years of campaigning, from people like Martin Lewis from MoneySavingExpert, but campaigners were sceptical that without a large input of resources and incentives for schools, it would be unlikely to change much.

The Money Charity’s 2016 report on financial education in schools was based on a survey of 126 teachers and found that, while most schools (90%) do deliver some financial education, teachers are hindered.  It’s poorly resourced, there’s a lack of expertise within the school staff,  it’s not a curricular priority (because it’s not on any exam) and there’s insufficient time to implement it into the school week (often there are as little as 30 minutes a week devoted to PSHE and many other topics to cover within that).  From what my own children have done in school it seems to be a basic idea of budgeting and managing a monthly salary or budgeting for a food shop for a family of four.  Useful stuff, no doubt, but it just doesn’t go far enough.

But surely financial matters are part of the Maths curriculum?  The Maths curriculum in England already contains the provision to:

“Solve problems involving percentage change, including: percentage increase, decrease and original value problems and simple interest in financial mathematics.”

But teaching a young person to calculate rates of compound interest without studying how it can impact on their lives does not amount to real financial education. Adding a £ sign to a maths problem doesn’t mean the child is learning about financial matters. Without the proper training, how can we expect teachers to teach?  There are undoubtedly teachers who are passionate about financial education and work hard to impart their knowledge purely out of their own interest in the subject, but without some vast change to the school week or a huge input of resources it’s hard to see how things are going to get better any year soon for the rest of students.

It’s likely that if parents want their children to know about all things financial it is going to be something they need to commit to themselves.  Who feels qualified to do that?   Mr  FU and I are still learning, for sure.  Ask us a few years ago and we probably would’ve given our children a very different message to the one we are doing now.  We’d probably have advocated a similar path to our own – find a good job to give you a nice lifestyle….

In the space of a few months we are definitely giving our own children a different message and encouraging them (especially the eldest who is 19) to learn about FIRE through the things we are setting up for them and the plans we share with them, but the average adult has no idea about FIRE goals, never mind how to start their children on the path.

Who’s going to teach their children, then?

Step forward, FI community.  You have a job to do!

What are your experiences of financial education in schools, either from your own school days or those of your family now/recently?

More importantly, what could we teach the youth of today about finance and when should we teach it?

What is your number one piece of financial advice you’d give to a teenager today?

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12 Responses to Financial Education in Schools… or the Lack of.

  1. Ms ZiYou says:

    It’s a very good point – I’m not really sure there was much financial education at my school. Most of the good stuff was actually taught in economics, which was optional.

    If we made economics more central to the curriculum, this would really help. And in my opinion, learning economics is as equal as history and geography and will be much more relevant in kids future lives.

    I see financial education following a similar path to sex ed..growing in popularity amongst parents.

    • Mrs Fu Mon Chu says:

      Hi Ms ZiYou,
      That’s a really good point – that economics needs a more central role in the curriculum – it’s a shame it’s not even an option in many high schools!

  2. YoungFIGuy says:

    Hi Mrs Fu – great post again!

    When I was in school (a bit over a decade ago) there was no financial education (and pretty much no sex education). What I’ve learnt is solely from my parents, work and self-interest.

    I’ll share my thoughts on financial education. Although, having thought about it last night and tonight, I’m not sure I can do it justice in just one comment, so I might follow up with a post myself (if you don’t mind!).

    1. It was great that financial education was made part of the curriculum but it’s not examined. Schools are very focused on exams and so I can understand that it doesn’t get the attention it deserves.

    2. There’s no set list of learning outcomes for financial education. For example, I’m a member of the CISI and they do a schools/college level starter course (https://www.cisi.org/cisiweb2/cisi-website/schools-colleges-universities/schools-Colleges). Each qualification has a defined list of learning outcomes (you can read the schools qualification one here: https://www.cisi.org/cisiweb2/docs/default-source/cisi-website/education/level-2-award/fundamental-of-financial-services-syllabus-v2-1-(final)-2015.pdf?sfvrsn=2). Without having a set programme I can’t see how even doing financial education will work as there’s no definition about what should be taught.

    3. If we’re going to be teaching kids finance (and economics), why aren’t we getting, say, the CISI or ICAEW involved? They’ve been educating professionals for decades. We could tie in any GCSE/A-Level exam into the various qualification pathways giving students the option to continue to pursue a profession outside of university.

    4. I’m also reluctant about the idea of making maths “real world”. It’s not really the point is it? If anything, I don’t think we teach enough “pure” maths. Things such as logic, abstraction and pure algebra. The issue I found most in work was not that people couldn’t add up, but they couldn’t logically solve a problem. There’s a risk when you mix and match subjects like this you end up not teaching either. Finance is different from maths. Much like Business is different from English. We need to ask ourselves, what is the point of education? Is it for the pursuit of learning or to prepare for the world of work? If you want to do both, which is challenging, you need to separate subjects, not try and merge them together.

    5. I’d really favour a practical type of financial education. I’ve got issues with how budgeting is taught (see my recent post for example). I think we should teach things that you otherwise learn by trial and error. For example: how to buy a house; how to read a payslip; how to calculate your income tax; how to read a credit card bill; how to open an ISA; what an investment fund is etc. It’s all good teaching abstract ideas such as compound interest, but that kinda misses the big things. I had no idea how to buy a house, or even how to calculate tax when I left school. Those things affect everyone!

    Sorry if my comment is a bit too long!

    YFG

    • weenie says:

      “The issue I found most in work was not that people couldn’t add up, but they couldn’t logically solve a problem.” Totally agree with you on this one, YFG.

      Sometimes, I think it’s laziness, but most of the time, sadly, they just don’t know how to go about solving problems and coming up with a solution. Is this as a result of what or how subjects are taught?

    • Mrs Fu Mon Chu says:

      Hi YoungFIGuy,

      Thanks for your comment – lots of interesting points raised and not too long at all! I’m a woman of many words myself, according to Mr FU. …Not sure what he means by that…! This is probably going to be an equally long reply, though!

      I think involving the CISI or ICAEW would be a great idea, because as you say, with no clear guidelines on the outcomes for financial learning the teaching is only going to be worthwhile if there is a passionate teacher or curriculum leader who is on a personal crusade to educate about all things financial. And even if a school has such a teacher, the pressures of examined subjects will always take precedence. I think some of the things tests in the Fundamentals of Financial Services could easily be part of school learning, which brings me to your point about what should be taught. I honestly think the curriculum is such a mess because the government can’t decide whether to prepare children for the world of work/life or whether school is the pursuit of learning, so there’s a jumble of everything.

      I agree teaching problem-solving is really useful, or rather not teaching it, but allowing time to let children solve problems (of all kinds) ….and I see my own children learning about how to tackle problems when they’re doing some coding and can’t make it work exactly how they want it to. Because they’re home educated they can spend ages making adjustments because they’ve the luxury of time school children don’t have. In any case, having done it myself, teaching problem-solving and logic in schools can be a real headache – half of the class will ‘get it’ instantly – some of the others will need a little help and some will need a myriad of approaches to help them see what to do – and there’s neither time nor classroom help for that. It’s even harder when the ‘problems’ used in the highly-prescriptive national curriculum are so abstract….for instance, the Maths SATs paper this year had a problem-solving question about a box containing trays of melons – what??? These things exist?!?! Another question asked children to compare estimates of alligator’s noses… I honestly despair when I look at the Key Stage 2 curriculum in general!

      The point you make in point 5 is where we FUs hope to go with our own children. Our youngest see a lot more of what we do financially as adults than they might do if they were still in school during the day, and we explain things to them as best we can. They’re already very good at spotting those payday-loan adverts – it makes me smile to hear a little voice pipe up “400% APR! Who would want that?!”

      • YoungFIGuy says:

        Hi Mrs FU, I’m really sorry I’m only just responding now (I didn’t realise that you had responded!)

        Your SATs paper examples are very funny! Just from a personal point of view, those questions would always mess me up. That’s because I generally try to visualise maths problems as I find it difficult to “deal” with numbers (I forget them or they “move about”). So making up these examples is counter-productive, I would come up with my own!

        BTW, I’m even more impressed you home-school the little FUs. Does that take up a lot of time? Do you find it difficult?

        ————————
        Weenie – glad I’m not the only one! I think as Mrs FU says its probably difficult to teach in schools. I only really learnt it through university (where I studied maths/logic/programming) and in the real world by having to deal with stuff. Maybe its one of those things you have to teach from a very young age?

        • Mrs Fu Mon Chu says:

          Hi
          Thanks for replying.
          Interesting that numbers jump about or you forget them – that’s dyscalculia, right? Did you have help in school for it?
          I love home ed – it does take up a chunk of my week but not formally teaching – I thought it would work out like this – do ‘school’ in the morning then go for walks in the afternoon or something – the reality of the situation is that I’m just the facilitator rather than the teacher and the boys get on with learning pretty much independently. It’s amazing how they just soak the information in. We do some structured English and Maths but that’s about it. Talking of which – I came across another great maths question today with the boys- you’ll have fun picturing the scene with this one – a boy called James who laid out 400 paper clips of one size and 250 paper clips of another size – how long was his trail in total?? I might be seeking FI but I’d consider helping the child out and buying him some plastic dinosaurs or something. Poor boy!

          • YoungFIGuy says:

            I’ve never been tested or anything. Its got a bit worse as I’ve got older but it’s manageable (a bit tricky if you’re an accountant!) my sister is dyslexic so I wouldn’t be surprised if I suffered from some similar issue (I don’t have problems reading however).

            Sounds great what you do you for the little Fu’s!

  3. weenie says:

    I learned about compound interest in Maths so knew what I was doing when I was saving my pocket money in a bank account when I was a kid. I also took the optional Economics subject at school. However, despite what I’d learned, this didn’t stop me from going into stupidly big debt with my credit cards, so some people can’t be helped! Fortunately, I came to my senses in the end!

    At least the girl guides might be benefiting from their new ‘saver badge’ – https://www.girlguiding.org.uk/what-we-do/our-stories-and-news/news/girlguiding-and-legal-and-general-partner-to-encourage-girls-to-become-financially-savvy/. Yes, privately sponsored by L&G but good intentions nonetheless.

  4. I don’t remember any financial education in my school years (finished a levels in 99) barring the percentages etc as you mentioned during maths class. Basics should include:
    How various types of Bank account work, direct debits, overdrafts, credit cards etc…
    Savings vs debts
    Taxes and NI
    How Mortgages work
    How the stock market works
    How the above links in to pensions
    How ISAs and SIPPs work

    There is loads more but that would be a great start!

    It’s funny to hear Young FI Guy saying there was hardly any sex education when he was at school 10 years ago. I remember loads of it when I was at school nearly 30 years ago. Probably overkill if anything… Do 8 year olds really need to know about the birds and the bees?! Haha.

    • YoungFIGuy says:

      100% agree TFS on your suggestions, financial education has to be practical!

      On the sex education, I think it’s because my school was ‘voluntarily aided’ by the church (whatever that means). So maybe they didn’t want the school to be talking about sex to 14 year olds? The total of it was: “here’s a condom, use one” (no explanation how, or where to get them) and a study play (which we took turns to read aloud) about a girl who goes to a nightclub, has sex and gets pregnant and her life is ruined.

    • Mrs Fu Mon Chu says:

      That’s a great list of basics. Some of your points reminded me that I did come across a nice little book for our boys called “How the World Really Works: Investment Banking” by Guy Fox, and apparently he’s written one on the economy, too. I like his work. The things he does are quite nicely presented with fun cartoon graphics and the above book would probably make a good starting point for many adults, too, I’d say! I’ll look out for more resources but there needs to be something ‘go to’ and comprehensive for it to be accessible to all.

      I think I’ve spent most of my adult life trying to forget the sex-ed we had in school which involved watching a very disturbing video involving a family of four – a dad, mum, son and daughter playing badminton (or was it frisbee?) on the beach naked. The stuff of nightmares!

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