How old were you when you learned how credit cards work? What happens when you’ve learned practical tips on budgeting, getting a mortgage, or navigating the world of student finance?
For many people in the UK, financial education is something we take on as part of life, learning from our mistakes as we go.
But the pandemic, and the financial uncertainty that has resulted, has highlighted costly gaps in people’s knowledge. According to the World Bank, two in three people worldwide are financially illiterate, including one in three people in the UK.
Financial education was introduced to the UK National Curriculum in 2014, but provision across the country still varies dramatically.
Claer Barrett, FT Consumer Editor, and Aimée Allam, Director of FT Flic, the FT’s Financial Education and Inclusion Campaign, answered your questions in the comments below this story.
Here are the highlights:
Tarma, FT commentator: We should introduce finance and taxes as part of primary school education and beyond. Present good reasons for understanding why we have money and how we use taxes in a democratic society. Business and money are part of normal life.
Claer Barrett: How would you (or other readers!) suggest that we teach elementary school age children about taxes? Perhaps a weekly pocket money deduction could be a good way to start a conversation? When my stepchildren were of high school age, I showed them my pay stub to educate them about taxes, part of a larger conversation about why we need to vote so we can have a say in how our money is spent.
Iano, FT commentator: First, teach them the value of money. Make them understand what it takes to gain a pound. Stop giving them things effortlessly! Make them understand what profit is and what it takes to make a profit. Make them understand that what goes up can come down in every way, and save for the down times.
Aimmee Allam: Getting paid for housework is divisive – I know many parents expect a certain minimum of chores/household help to be done without pay and don’t want to foster the expectation of being paid for everything. Personally, I’m pro paying for more out of the ordinary tasks, say a few quid to clean the car, whereas I’d certainly expect the dishwasher loading/washing to be done for free. What policies do other readers have in their homes for housework? Also, how would you teach about profit and loss?
FT Commentator Tony Vonshee: I learned about money when I first earned it by helping a relative who was paying me for homework. So my mother took me to the bank to open a savings account. I gave the money to the bank and they gave me my first bank book. When I was paid again for another task months later, we did the same thing. Only this time the banker made two entries in my book, one for the deposit and one for the interest. I’m sure the banker explained the interest to me, but it didn’t matter, all he remembered was that if I give the bank my winnings, they give me a little more. This was at a time when savings earned interest. The best way to teach about money and finances is through experience.
Claer Barrett: That’s a really lovely story Tony, thanks for sharing. These early memories of money are crucial in influencing our future financial habits. We also think exploring them can really help people understand their emotional connection to money.
Do you want to read more questions and answers? The conversation happened in the comments below, so read on.
To find out more about FT Flic, get involved and donate to our appeal, visit the website ftflic.com