Jayne Dowle: Learning about money needs to happen early on

MY teenage son now has his own current account. When his debit card arrived in the post, he couldn't wait to rush off to the shop to use it. His first intended purchase? A bottle of pop and a bag of chocolates.
Should there be more financial education in schools?Should there be more financial education in schools?
Should there be more financial education in schools?

Unfortunately, being my son, he didn’t read the instructions properly. He failed to realise that his bank account number is not the same as his PIN number, which is of course sent separately.

Last year an All-Party Parliamentary report recommended that financial education should start as early as primary school. Apparently, it’s already mandatory at secondary level, but the finer details seem to have passed 14-year-old Jack by.

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There is little, if any, provision for learning about money at his school. He told his new bank manager this, gravely informing him that it was time he took responsibility for his own finances so he would know “how to carry on” when he was older.

I will spare Jack further embarrassment, but let’s just say that the very first time I put him in charge he managed to get his card declined. It’s not a great start, is it? But at least it is a start, which is more than many youngsters get.

There are so many people reaching adulthood with scant knowledge of how to effectively operate a bank account, never mind get their heads around mortgages, loans and other borrowing. It is no wonder so many individuals end up saddled with insurmountable debt and serious money problems, simply because they don’t understand how and why the banks charge them for going over-drawn or breaching a credit limit.

I am determined that both Jack and his 11-year-old sister, Lizzie, are going to be both financially responsible and independent. That’s why I didn’t hesitate when Lizzie mentioned a few weeks ago that at her age she qualifies for a bank account in her own name.

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I gave her the task of finding the best deal, pointing her towards a couple of online comparison sites. After some deliberation and family discussion, we agreed on NatWest, which has a current account aimed specifically at the needs of 11 to 17 year-olds.

To start them off, I gave each child the grand sum of £50. Lizzie, far more prudent than her brother, also had £40 in Christmas money still squirrelled away in her purse to add to her stash. She looked especially proud.

The gentleman cashier who took their first deposits adopted a suitably grave and respectful manner. There was something very solid, responsible and somehow Victorian about the moment. Heads were held high. Chests were puffed out. If Jack’s PIN number debacle was anything to go by, I suspect that things might not go as smoothly over the coming years, but that’s life.

What I think will happen is that my children won’t just learn about money, they will also learn a lot about themselves. Lizzie has already earmarked the cash she will be receiving in lieu of Easter eggs for her next deposit. Jack is wondering how old you have to be before you can have a credit card. Yet he also makes no secret of the fact that his greatest ambition is to own a house.

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He has yet to connect the concept of working for a living with owning said house, but we live in hope. At least now he has a bank account he can begin to understand the process of money coming in and money going out.

I can certainly see why MPs were despairing over financial education in the House of Commons. It’s not simply a matter of adding yet another subject to an already-crowded curriculum. In the modern world, it is absolutely vital that our young people gain a better understanding of financial matters.

I quizzed Jack on what financial education he is actually receiving at school and he muttered something about percentages. It’s not enough I agree, but I would also argue that it’s not fair for parents to expect teachers to take charge.

A recent report for the Government-backed Money Advice Service pointed out that lifelong attitudes to money are formed in children by the age of seven. Sorry if it makes you squirm, but this means that a lot has to happen in the home.

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Think carefully about the example you set. If the very young only ever hear arguments over money from their parents, or see mummy running to hide the credit card bill from daddy, they have no chance of growing up with any idea about how to take control of cash. Instead, it will exert its own control over them, often with ruinous consequences.

That’s why it is vital for parents to tackle the subject head-on. It might mean a few hiccups and red faces along the way, but surely this is preferable to a lifetime of misunderstanding and fear.

I’m not sure Jack would agree with me right now. One day, however, when he’s sitting there in his own house, with all his bills on direct debit and a pension pot simmering away, I hope he will look back and thank me for throwing him in at the deep end.