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?
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?