Financial education
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Some time ago, Martin Lewis of the Money Saving Expert fame launched a petition on the government website aimed at getting a better standard of personal finance education taught in schools. If you haven't already signed the petition, please do so. It's a great cause and one more people should take note of. The goal of 100,000 signatures has already been passed, but the more people that sign it, the more likely it is to be taken seriously by those in a position to do something about it. At least, that's the hope...
Financial education in this country is terrible. I don't remember ever being taught about managing personal finances at school. Once the teachers had taken us to a level where we could figure out how many pieces of fruit we'd been left holding after a few miscellaneous transactions, we were considered good to go. Thankfully my mother was prudent enough to give me a more substantial framework on which to build my knowledge. My career since then, as well as a personal interest, has furthered that to a point where I feel reasonably savvy. But without that, I fear I'd still be counting fruit.
Unfortunately, even among my own social and vocational groups, I am not considered the norm. Few of my friends have or regularly pay into a pension. Fewer still have savings. Many are or have been in some kind of significant debt. Some often struggle to make ends meet. Most have come from a similar or even better educational background to me so I'm not surprised. If they received the same financial education I did at school, their finances make perfect sense.
It's sad that Martin Lewis's petition needs to exist. I applaud his efforts and he has my support, but it is a shame that it is required when what he is proposing should already be a part of the curriculum. It is appalling that students aren't educated about managing their finances or how to be responsible with money—including debt. At the end of their statutory education, many students will choose to go to college or university. For most this will incur their first major debt and in many cases that debt may take many years—perhaps the majority of their working life—to pay off (not that this should discourage them from going to university: repayments are relatively minor, they only occur when the 'student' earns over a certain amount and the debt is written off after thirty years).
I should point out that this blog is not aimed at teachers, who already have plenty to do. That said, if any teachers reading it choose to sign the petition or, even better, find their own ways to work financial education into their (relevant) lesson plans, then superb. The blog is aimed, however, at the governments to whom the petition is being submitted. Personal finance education aside, the thing that inspired me to write this blog at all is that meeting (and surpassing) the number of required signatures does not guarantee that the government will do anything about the issue. It means they will consider debating it. It will get a hearing (this week, at the time of writing). But there's no guarantee that all MPs will be there to hear it, and there is even less guarantee that the debate will lead to a policy being put in place to ensure a proper level of financial education is provided in schools.
The system is broken. It needs fixing. As of August 2011, the average household debt, not including mortgages, stood at £8,064. That average is across all households, even those without debt. The average debt of those with unsecured loans was £15,507. The average household debt including mortgages was £55,803. (Source: http://www.moneybasics.co.uk/en/resources/money_information.html.)
We are currently in the midst of the largest national and international (certainly in the western world) debt crisis ever. And yet it takes a petition to even get a debate on whether to consider educating the nation's children on personal finance. Despite its often spectacular failures, I want to believe that the government will take this on board and do the right thing when the debate arrives in parliament. Our children's future depends on it.