I’ll give you the tale of two children on a school trip. Jack, en route to three days in Berlin at the age of 13, spent almost every single euro in his wallet on designer-label shirts at the airport before departure. He then spent most of his time in Germany begging food off girls.
Meanwhile, Lizzie, who is 12, returned from a two-day sojourn in the capital with £32 left out of her spending money of £50. There weren’t many shops in London, she said – in other words, she didn’t spot a Primark – so she’s squirrelled away the change to pay for her summer holiday clothes.
Both these children are mine. As a parent then, I know from direct experience that however hard you try to teach children about money, the outcome is never guaranteed.
But, as the saying goes, “every little helps”. So that’s why I’m glad to hear that 20 leading City institutions are urging the Government to include financial education as a mandatory part of the Primary National Curriculum. They’ve set up an initiative called KickStart Money, which aims to test the effectiveness of teaching under-12s about personal finance.
Rather than waffling on about piggy banks, it looks like quite a scientific undertaking. The programme, delivered in three 75-minute workshops by expert trainers, aims to help youngsters understand the value of money and appreciate the difference between “needs” and “wants”. In a world dominated by instant gratification, this can only be a good thing.
KickStart co-chair Jane Goodland, a responsible business director at wealth management group Quilter, disagrees with politicians who believe that competency with numbers equates to being good with money: “While basic numeracy skills are helpful for budgeting and saving, many of our financial habits are in fact motivated by our attitudes and behaviours learned at a young age, and not by our ability to do complex maths.”
An independent evaluation of the impact of the KickStart programme found that by the end of the sessions, 68 per cent of the pupils who previously showed little capacity for delaying gratification had learnt how to do so. It also inspired a new enthusiasm for saving.
The children who took part also demonstrated an improved understanding of basic financial concepts, with a 43 per cent increase in the number of pupils able to define “habit”, and a 67 per cent rise in those able to identify the correct description of “budget”.
Three months after taking part 70 per cent were “working towards a saving goal”, while teachers reported that 87 per cent of their pupils understood that financial decisions had consequences, a situation Jack became only too familiar with staring at an empty wallet in his hotel room in Berlin.
However, knowing what I know about the extremely onerous primary school curriculum, I can’t see how this admirable idea is going to fit into the timetable. With all the pressure to raise standards in SATs tests, in many schools there simply wouldn’t be the capacity to incorporate it.
I can also hear primary school teachers groaning at the thought of having to get their heads around yet another subject. Whilst the KickStart programme has raised £1m for sessions, it won’t be able to stretch as far as every school.
Step in government please. Looking at the financial news in general, I’d urge ministers to do all they can to ensure children do get a grip on money before they leave school.
Only last week the Bank of England warned of its concerns at rising levels of household debt. As a country, we’d be doing our children a disservice if we didn’t at least try to equip them with the tools they need to survive. Every concern a young person has, from studying at university to buying a home to having children themselves, has financial implications.
I know from talking to my son and his friends that despite certain profligate tendencies, they do have serious anxiety about how they will be able to afford to live. And the trend is only downwards; study after study has shown that the idea that children always end up better off than their parents is obsolete. Looking at the financial pressures my own generation face, I can’t imagine what the future holds.
I know parents have a role to play, but not every parent is in a position to pass down good advice. And even when some of us try – as the differences between my own son and daughter indicate – there’s no guarantee that they’ll follow what we suggest.
Believe me, youngsters will take any subject far more seriously if they have to study it at school. As Ms Goodland says, it’s about addressing fundamental and underlying attitudes, rather than teaching percentages. Although that’s useful too, of course.
So, there’s one lesson we should all learn from this. It might not be easy, but teaching kids about money will always add up.