09 Nov 2011 | Opinion

Money doesn't grow on trees 

Has teaching young people about money ever been more important?

Austerity is hurting families, their savings are under threat, and a university education is about to treble in price.  

Consumer campaigner Martin Lewis says that with new tuition fees on the way, “we're still a nation which has educated our youth into debt, but never about debt”. His petition calling for personal finance education to be compulsory in schools, launched this autumn, and has reached the 100,000 signatures needed to force a parliamentary debate. He says “the cost is relatively small, the gain priceless - better consumers, better borrowers, less mis-selling.”  

The Personal Finance Education Group (PFEG) charity says 93% of teachers and parents think that personal finance should be taught in schools and 66% of adults believe money lessons would have helped them cope better with today's financial challenges.  

But meanwhile, money programmes for pupils of all ages are delivering valuable benefits around the country. They tend to be funded by financial organisations – and why not, you might ask? Without them, young money sense would be a lot poorer.  

They are also vital when you consider that children are becoming increasingly precocious when it comes to cash. According to PFEG, they get pocket money at seven, their first mobile at eight, and are starting to buy their goods online at the age of only 10.  

And yet children are not always clear about where this disposable income comes from. A recent Halifax survey of children found that 55% understood that money comes from working, 30% said it came from the bank and 18% said the government – rising to 29% in Scotland. One in 20 children believed the tooth fairy dispensed cash, and 2% said money really did grow on trees (4% in London!)  

A further cause for concern is unrealistic financial aspirations held by many youngsters; research by Clydesdale and Yorkshire banks found 68% of children believe they will own their “dream home” by the time they are 35.  

Just as well that these banks run ‘Count Me In 123’, an award-winning children's numeracy programme operating in libraries across Scotland and England. ‘Count Me In Primary’, limited currently to Dundee, Leeds and Glasgow, focuses on developing financial capability.

Clydesdale has also created ‘Talk Money Talk Solutions’, a teaching resource available to all of Scotland's primary schools.  

Nationwide Education, an offshoot of the building society, has built a range of financial capability programmes over the last few years, with resources designed for use on interactive whiteboards and PCs. This is a thoroughly modern campaign for thoroughly modern schools - things have certainly moved on from the stubs of chalk and positively Victorian exercise jotters of my schooldays - and I only left school five years ago!  

The campaign covers all ages from four to 18, including a thoughtfully-written Teenage Guide to Money.  

NatWest and the Royal Bank of Scotland make much of their community credentials these days, but RBS started its Money Sense schools work back in 1994.  

Its PFE Awards created four years ago recognise best practice in schools around the UK. The citation for one 2011 winner (St Luke’s High School in Barrhead, Renfrewshire) shows that what’s really wanted is “a creative approach to delivering the PFE programme across the whole school”. This school’s inspiring teachers had instigated discussions on several finance related topics, including what you would do with £1m, jobs in the real world, and paying for a holiday, which helped to highlight the true value of money. Even better, senior pupils were also involved in teaching children at local primary schools about money management.  

Not only does it sound incredibly useful, but a lot more fun and interactive than your typical daily torment in Algebra.  

Sticking in the West of Scotland, we turn to Glasgow Credit Union, which has more than 27,000 members, and works with primary and secondary schools on its outreach mission. It provides sessions for children aged three to 18, which aim to spark essential financial skills from coin-counting to budgeting.  

PFEG recently awarded its accreditation to a new online game Saving Squad, created by trade body the Association of Financial Mutuals, and is being played in Lancashire primary schools and elsewhere. Children choose to be a character living and working in an imaginary town, earning money that they save in an imaginary bank account – and spend. They answer maths questions and problems to earn points which convert into cash in the bank. Okay, so maybe some of those nightmare Algebra lessons will come in useful…  

For older players, Shares4schools, a national investment competition run by retail stockbroker The Share Centre, gives teenagers a taste of the stock market without the pain of losses – but with the incentive to win cash for their school.  

M&S Money also has some top tips for parents, making teens responsible for their own expenditure (for instance their mobile phone bill) explain the bills you yourself need to pay and how you budget for them; be honest about your own financial mistakes; discuss the difference between “good and bad debt”; and help them set up their own savings or current account. You never know – this kind of hands-on financial advice could ignite a teenager’s passion for personal finance and even prompt them to write about it for a living, like a certain young author of this article.  

Baillie Gifford also runs a successful annual Young Writers’ Competition in conjunction with the Financial Mail, which was set up to help educate young people about the importance of personal finance.  The competition is now in its 6th year and is open to in two age categories, 13-15 year-olds and 16-18 year-olds, there are some great prizes on offer this year, including an iPad and work experience with the Financial Mail. More information on this year’s competition can be found here.  

With our economy in slo-mo, now is a potentially scary time for young people to be entering the world of banking, debt, rent, tax, and savings.  But money sense could be their secret weapon for survival and future prosperity.

Iona Bain
Iona Bain is a young Scottish journalist who writes about personal finance matters for children and young people. She began writing Iona’s Young Money Blog in 2011, the first of its kind in the UK, after taking an intense interest in the financial issues affecting the younger generation, particularly since the recession took hold. Iona now writes for We Know Money, a new collection of websites being developed by moneysupermarket.com. She has previously been published in The Herald and Daily Telegraph.