Financial Education Compulsory For Schools?

December 16th, 2011 Posted in financial education in schools
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UK Government to consider making financial education a compulsory part of the school curriculum.

Earlier this week, the All Party Parliamentary Group (APPG) on Financial Education for Young People, which has the support of 226 MPs and Peers, issued a report calling for compulsory money lessons.

Pictured is Daniel Britton from The Financial Fairy Tales with Martin Lewis and Carol Vorderman at the House of Commons Launch. Daniel contributed evidence to the enquiry based upon his extensive experience with financial education from primary schools to young adults.

One of the main recommendations is teaching split between maths and Personal, Social, Health and Economic (PSHE) studies.

Government pledge

Nick Gibb, Minister for Schools, said: “I think we’re all in agreement about the importance of good quality financial education. It is true that young people are growing up in a materialistic world that they are not prepared for.”

Gibb added the Government said the APPG report’s proposals will be included in a review of the national curriculum.

He also confirmed PSHE won’t be compulsory in the curriculum but it is possible for elements of it to be compulsory, of which financial education could be one part.

Earlier today, Shadow Chancellor Ed Balls, writing for MoneySavingExpert.com, said young people must be taught about money matters.

There was also much consensus in the debate that including financial education as part of maths could make maths a more attractive subject a move championed by TV’s Carol Vorderman

Conservative MP Justin Tomlinson, chairman of the APPG, led the calls for financial education to be made compulsory, and to be taught at both primary and secondary schools.

Tomlinson said the next generation needs to be equipped with the key skills to understand issues such as how to compare energy tariffs and how to calculate APR and interest rates.

He said: “We have a duty to equip people to make informed decisions, so they can understand the implications of what they are doing based on their own circumstances.”

Widespread support

Conservative MP Andrew Percy, chairman of the APPG inquiry, said at the debate: “This is about real maths skills, about using real life experiences to support the drive for ensuring our young people enter this complex financial world in a position to make better decisions.”

Labour MP Jenny Chapman said: “An investment in knowledge always pays the best interest.”

Martin Lewis, MoneySavingExpert.com creator, says: “In many ways, this was Parliamentary discussion at its best. Of the members who were there, many noted the importance of the e-petition and the number of constituents who contacted them who said it was important.

“This is by no means the end of the battle but it is a firm foundation that slaps the campaign into ministers’ faces and leaves them in no uncertain terms that unless this is taken seriously, not just the signatories of the petition, but many MPs, will be on their backs.”

Download the full report from the pfeg website here

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Pensions Report Reveals Lack of Financial Knowledge

December 8th, 2011 Posted in financial education
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The latest Friends Life Visions of Britain 2020 report shows the education system in the UK is felt to have failed to provide recession hit Britons with now-needed financial knowledge. The Pensions Reform report has been compiled on behalf of Friends Life by The Future Foundation and is entitled “Pensions: The Root Problem”.

Some 83% of the UK population believes not enough is being done to educate people in financial matters, according to the study. And 63% said they wished they had received financial education lessons in school. Similarly, 65% thought that “financial advice should be provided in the workplace.”

The study by think tank the Future Foundation found that as a result of this lack of financial education only one in five people believe the nation’s children will be more savvy about money matters than previous generations, with nearly half (48%) disagreeing.

The study also found that this lack of financial awareness has had the knock-on effect that increasing numbers of school leavers and graduates have no idea where to find advice on pensions, for example, with over 65% of 18-24 year olds not knowing how to get this advice.

Martin Palmer, Head of Corporate Benefits Marketing at Friends Life, said:
“It is clear from our findings that there is a desire from the younger generation to have better knowledge on how to deal with their money matters. We are advocates of personal responsibility, but think more could be done in schools. However, we believe the workplace is the best and most effective place to provide financial education as people actually have some pay to spend and more choices to make.

“The current economic climate is not helping the situation and people will have other financial commitments or priorities, but we need to help individuals get to a position where they see the real value of putting money aside for the short, medium and longer term.”

Engagement and communication with the younger age groups is also an issue as more than a third (34%) of 18-24 year olds and over a quarter (26%) of those aged 25-44 said they found pensions “too boring” to interest them.

Palmer of Friends Life continued:
“The challenge is to start using different forms of media to communicate with people. We need to try to communicate less information but to do it in a more effective way. At the moment, as an industry, we tend to bombard people with loads of information leaving them unable to see the wood from the trees.”

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10 Reasons Why Money Skills Should be Taught in Schools

December 2nd, 2011 Posted in Uncategorized
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We all know that schools are supposed to teach reading, writing, and arithmetic, but what about the ability to handle money? With more Americans in debt now than ever, it seems to be logical that students be taught more than just who is on the money. Below, we have gathered a list of ten reasons why money skills should be taught in schools.

1. Too much debt – As noted above, more and more Americans are faced with more debt than ever. This can include house payments, student loans, bank loans, and much more. Having too much debt can cripple a family or individual and should definitely be taught in schools.

2. Credit cards – Another way people pile up so much debt is through the lure of credit cards. By promising a big rush now, consumers often run up their limits within a period of months and can spend years paying it all back. Teaching how credit cards really work, along with the topic of compounded interest, can give the kids a truly valuable lesson.

3. Bankruptcy – Other than paying debt off, bankruptcy is another way people get out of debt. Not only does bankruptcy carry a high penalty for those filing for it, it is also bad for the economy as a whole.

4. Foreclosure – If you own your own home or are making payments on it, getting too far into debt can put your biggest investment at stake, your home. This is doubly so for people who take out a second line of credit on their house and is taught too little in schools.

5. Retirement – It may sound like a far off time for your students, but having a retirement plan is never a bad idea. Having teachers explain why saving for retirement can be a good and rewarding thing.

6. College – This major event will come as soon as students are done with high school. Teaching kids about money will better prepare them for the world of college where everything from tuition to toilet paper can be an expense.

7. Budget planning – No matter what age the children are, if they can count, they can make a budget. This includes having teachers give children an imaginary income, family, expenses, and having them plan out what they want to spend on what.

8. Investing – Older children can take on this challenge. Have the children invest an imaginary amount of money in a stock. Then have them check it daily to see how much it rose and fell.

9. Taxes – No matter what your students go on to be, they will have to pay taxes on it. Have the children fill out mock 1040 forms to see how much they will pay in taxes, social security, etc.

10. Saving – One of the most important money skills ever, kids see far too much of celebrities flashing their cash and too few who save money. Teaching them the pro’s and con’s of each will give them a good foundation in the future.

Holly Kearny manages the site Teaching Degree. Her site helps students find the right college to get a teaching degree.

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Fairy Tales and Political Correctness

November 21st, 2011 Posted in Uncategorized
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The famous fables and fairy tales that earlier generations of children grew up with are being re-written or are completely falling out of favor with those who aspire to “Political Correctness”. What people don’t realize is that many of these tales have been “sanitized” repeatedly over the years, having started as truly gruesome stories. In early versions of the “Cinderella” tale, the two cruel sisters mutilated themselves in order to fit into the slipper, and the two of them ended up as blind beggars when birds pecked out their eyes.

Most stories and lore evolve over time, and fairy tales are no different. Here are some examples of old stories that have come under the modern microscope.

  1. Rapunzel – This grim tale from the brothers Grimm is too dark, say many people today. They point out that this story contains violent imagery, blatant sexism, and criminal child abuse. Imagine, a little girl being given up for adoption by thieving parents, only to find that the poor child is then placed in solitary confinement, and only a man can save her.
  2. Cinderella – In a corrected version, Cinderella might not be burdened by cruel sisters and the sexist drudgery of menial housework. Instead, she might end up stuck in a dead-end office job, just like everyone else.
  3. Goldilocks and the Three Bears – Another potential “Amber Alert” situation, though there does not appear to be any great hue-and-cry over a missing girl’s whereabouts. Didn’t anyone in the olden days have any parents (historical note: when some of these tales were first written, life-expectancies were only in the 30s, so there probably were a lot of parent-less children)?
  4. Jack and the Beanstalk – Why is it never “Jane and the Beanstalk”? Well, it is probably just as well. Jack turns out to be a little thief who doesn’t follow his mother’s instructions very well. He steals from an ogre, and then kills the poor guy to boot. In today’s version, Jack might have just gone out to get a job so he could help his poor mom out, and he certainly wouldn’t have jeopardized his future by stooping to thievery and murder.
  5. Sleeping Beauty – Another motherless story, this one also involves probable nudity. When the king forbade the spinning of all materials in order to thwart a witches curse, the realm probably ran out of clothing for the citizenry. This is another one where it’s a guy rescuing a girl in trouble, instead of maybe the other way around.
  6. Hansel and Gretel – Wrong in so many ways, this tale involves child-abuse, spousal abuse, inhumane treatment of captives and poor nutrition. The modern version might have the cottage windows made of Splenda rather than clear sugar.
  7. Snow White and the Seven Dwarfs – The term “dwarf” has come under fire in recent years, but “Frozen Caucasian Water and the Seven Altitude Challenged People” isn’t a title the folks over in Marketing are looking for.
  8. Red Riding Hood – “Sam ‘The Sham’ and the Pharaohs” admonished Red, singing that she shouldn’t “. . .go walking in these spooky old woods alone”. Good advice for a small child who was sent, unattended by a parent, to visit an aging relative who was probably in need of 24-hour in-home care. Of course, there is also the wolf, a stalker and an abuser of the elderly.
  9. The Pied Piper – The Piper of the tale was obviously a cult-leader who had lured not only the rats, but also the children of the beleaguered township of Hamelin. The Pied Piper obviously had anger-management issues, which might have been addressed with classes and counseling in a modern version of the story.
  10. The Emperor’s New Clothes – This tale has a pair of swindling tailors hoodwinking a vain emperor into thinking that the “nothing” they have made for him is a fine suit of clothing. A little kid busts the scam wide open, but the emperor is held out as the selfish patriarch that he is.

Almost every story has elements that may not suit future generations. Who knows, in a few hundred years, Cinderella’s step-sisters may turn out to be kind and gentle care-givers.

Article courtesy of my friends at www.babysitters.net

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Children’s ISA’s – What You Need To Know

November 20th, 2011 Posted in kids and money
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It’s commonly believed that in the UK,  Children are exempt from tax. This is in fact a money myth.  They are treated in exactly the same way as adults, which means each child can in the 2011-12 tax year earn up to £7,475 tax free from income, savings or investments. Grown-ups who enjoy managing money sometimes look into an online accounting degree.

Usually children under 18 don’t earn that much from part time jobs etc, apart from a few young entrepreneurs, hence the often held belief that kids can earn tax free.

Assuming your child won’t earn more than £7,475this financial year (watch out child prodigies!),you can ensure that any interest is paid without the tax being automatically deducted by filling out the Inland Revenue R85 form (available from most banks or online).

Alternatively you can open a children’s ISA which allows interest to be paid free of tax plus attract a  much higher interest rate of upto 6% in some cases. Children’s ISAs were launched in November as an encouragement for children (and adults on their behalf) to save money. Many new accounts offer incentives such as piggy banks or high street vouchers. We think they should give away sets of The Financial Fairy Tales books instead as this will have a win win effect of encouraging new accounts and teaching children about money, (marketing execs take note!)

In essence children, parents, grandparents or anyone else can make deposits of upto £3600 in a tax year. The money stays on deposit where it cannot be touched until the child is 18. This makes it a great way of saving for future university fees, a first car or a gap year in the Caribbean!

Here are a round up of some of the best articles we could find on the subject of Children’s ISA’s

http://www.moneysavingexpert.com/savings/child-savings-tax-free

http://www.bbc.co.uk/news/business-15522384

Once you have decided on opening an account, this is a great opportunity to discuss the benefits of saving and start a money conversation with your children. Keep them involved with the choosing, the paperwork and making the first deposit.

Who know’s their savings might need to help look after you when your pension runs out!

 

 

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