Young People and Finance

I have two daughters. One receives her month’s pocket money and manages it carefully, so that by the time she receives the next month’s instalment she still has a little left. This has enabled her to build up a little savings that she tops up with birthday/Christmas/holiday gifts from her grandparents.

Now, my other daughter has a different strategy. She receives her pocket money and has blown the lot within the first week and spends the rest of the month applying the ‘puppy-dog eyes’ trying to extract any extra funds she can out of her Mum and Dad!

Unfortunately, the worrying fact is, that it is my second daughter that appears to typify the lack of financial capabilities and knowledge of young people today.

According to a survey conducted by Barclays Bank and the charity Personal Finance Education Group (PFEG), 42% of under 25s could not interpret the difference between being in credit and overdrawn on a bank account statement, while more than a third did not know the correct meaning of APR, in relation to interest charges on loans or credit cards.

Another frightening statistic, highlighted by the survey, was that 13% of the young people that took part, did not know what an overdraft was, with 8% believing that it was a low-cost, one off loan from a bank.

The chief executive of PFEG commented by saying that “It is clear that many young people are entering adult life with dangerous gaps in their financial knowledge that could lead them into serious financial difficulty.” She continued by stating that “These findings underline the need for all schools to teach their pupils about personal finance, to equip them with the skills, knowledge and confidence they need to manage their money well.”

For the sixth year, between 9th - 15th June, PFEG are running their ‘My Money Week’ event, the aim of which is to enhance the financial capability of young people in both primary and secondary schools. The ‘My Money Week’ event is all about teachers inspiring young people to gain skills, knowledge and confidence in money matters, to allow them to become financially literate in order to thrive within our society.

‘Teachers Resources Support’ can assist teachers who are wishing to use this special week to highlight and teach financial capability to their learners by means of a number of high quality, engaging financial capability resources.

Team work is encouraged at many points within the resources and this potentially allows students’ presentation skills to be practised and developed, as well as providing a competitive element for some of the activities.

On the one hand, the lessons look at the important concepts of saving, investing and lending money and, on the other, borrowing money. Investing (and the relative risks) and interest rates are considered, and different sources of credit explored, with an indication of their relative costs.

All-in-all, the lessons provide learners with ample opportunities to gain broad financial skills and knowledge as it is fair to say that in recent years, with the much reported ‘age of austerity’, personal financial security and the managing of household bills has become increasingly more difficult and so it is it is crucial that young people receive good understanding and knowledge in the area of financial capability, as in the future, no one knows what financial burdens we may encounter.

Written by Steve Gresty on June 04, 2014 12:17

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