Our schools include many topics in their curriculum to help children mature into well-rounded adults, but one aspect that could be lacking is more emphasis on financial literacy.
Some believe that this topic could be included in maths lessons to help educate kids from an early age on how to save money, spend money, budget money and also about investments. Choosing to do this gives the younger generation crucial skills when they approach adulthood, and could be introduced into lessons from a younger age, tailoring content as they get older.
Fast Web produced a blog post suggesting that we should re-evaluate how we’re educating students (or not educating students) on these important life aspects. They set out five key sections to consider when teaching our children about financial literacy:
Creating a budget is crucial in managing your finances day to day, month to month and year to year. In this modern world, it is easier than ever to create a budget with the help of websites and apps, such as Wonga’s excel budget template. You do not have to spend hours designing your spreadsheet, just simply input your own figures into the template provided. You can then get a better look at how your incomings and outgoings match up, and what you have spare at the end of the month. This is an important skill that can be taught from teenage years where your child may get their first job.
2. Understanding Interest Rates
Many financial products talk about different types of interest, such as compound interest. It is important to know what this means as it can make the difference between borrowing a small amount and paying back much more. You do not need to be a mathematical whizz, but knowing the figures can really put things in perspective, and is something that the younger generation would do well in learning.
3. Saving, saving, saving!
The majority of students do not prioritise saving as much as they should. Retirement seems so far off in the future, that it can be difficult to put it into your plans right now – but you should! Learning to save early on can help you gain the skills you will use throughout your life. It will get you in the habit of saving, even if it is only a little each month. It can all add up and make the difference in the long run.
4. Debt Cycles
Many younger people, when embarking on their first apartment and embracing the adult world, don’t realise how easy it is to ruin their credit – and how difficult it can be to regain credit. Getting into debt young can hinder a lot of your possibilities later on in life. It is important to teach our children about debt, credit scores, and how to check your financial credit report. This gives people the power to control their finances and not get stuck in debt cycles.
5. Identifying Cyber Crime and Financial Fraud
Another key skill to learn early on in life is how exposed you may be to cyber-crime. Stealing one’s identity is a common crime these days and one that you can (and should) take steps to prevent. Taking preventative measures, like password protection and limiting the amount of information you share online, is very important. It is vital to safeguard your finances as best as you can to avoid these types of crime being carried out. Digital crime is growing and teaching about protecting yourself and your details can stop these cyber criminals in their tracks.