I have recently had the pleasure of delivering a financial education workshop to a group of 15 year old girls from Sarah Bonnell School in partnership with RedSTART.
It is the second time that I have delivered a workshop like this and I always come away from teaching children having thoroughly enjoyed it. I love their engagement and response, they are so willing to get involved and are unafraid to ask questions and it brings me real joy.
I feel very passionately that our youngsters need to have financial education and I believe that it should be part of the school syllabus. I believe that part of the reason why the financial system and the country is in such a deep recession and debt crisis is because we have never been taught how to mange money properly and the level of financial literacy amongst adults is poor. Many don’t understand basic budgeting skills and certainly don’t understand compound interest either from a positive savings point of view or from a negative debt point of view.
When I was at school, we were taught about cloud formations, art and the sciences, which most of us will never use. We were not given the basic skills needed to manage our finances and I don’t believe that this has changed in over 20 years since I left school.
Children need to be taught about the importance of budgeting and how to do it. They need to understand the importance of saving money and planning for the future rather than living for today. They should understand how dangerous debt can be. They need to have instilled in them a mindset of saving for the things they want. They also need to learn about investments and the basic asset classes so that they have an understanding of the basics of investing for the short, medium and long term.
Children need to be taught about the dangers of things such as payday loans. They should be educated in what a mortgage is and how it works, they need to understand that they have to save for a deposit and how much houses really cost, especially in London. They also need to learn about the importance of protecting themselves financially with critical illness cover and income protection and then when they have a family or dependants, life cover too. Only 1 in 5 adults have critical illness cover and 1 in 10 have income protection and it is because they don’t understand it and the need for it until it is too late.
In my session, I taught the children about what a pension is and how tax relief works in a simple and easy to understand way. Children need to understand what a pension is, what an ISA is and why they are important tools for building future wealth.
I am deeply passionate about educating children financially and giving them the tools and skills to not make the same mistakes that we have all made. I plan to continue to work with RedSTART to educate the youngsters. RedSTART works with schools in less affluent areas to give those children the education and understanding to manage their money in the future. I will work with them as well as on my own initiatives to bring financial education into schools.
Hannah Foxley is the director of Independent Financial Advice firm The Women’s Wealth Expert. She has 10 years experience as a financial adviser and holds both Chartered Status and is a Fellow of The Personal Finance Society. She is passionate about financial planning. Her mission is to redefine the way that people feel about receiving financial advice. She is known for transforming futures and leaves her clients feeling confident, secure and liberated.
She can be contacted via her website http://www.thewomenswealthexpert.co.uk/