For reasons that will become more apparent over the next week or so I have been giving some thought to what might be on a curriculum for young people (probably aged 16 to 18, but maybe older) on the real world financial issues that they might need to face.
I asked ChatGPT a number of times and got the biggest load of nonsense that would best suit the purposes of the financial services industry. So, just looking at headings alone, and leaving most thought on detail until later, I came up with this:
- Money
- Types of money
- Types of bank account
- Cash v Card
- What type of card
- Budgeting
- Borrowing
- What are interest rates?
- APR
- Loan sharks
- Student loans
- What, and what not, to borrow for
- Budgeting repayments
- How to get help
- Renting
- Rental agreements
- House sharing
- The risks
- Council tax
- Insurance
- Managing the bills
- Being a savvy consumer
- Buying online
- Being aware of fraud
- Avoiding deals that suck you in
- Being careful about useless subscriptions
- How to shop - making a list
- Do you really need whatever it is you're about to buy?
- Insurance, generally
- Employment
- Work
- Employee rights
- Minimum wages
- Trade unions
- Discrimination
- Avoiding ‘cash in hand'
- Self employment
- What it is
- How it is taxed
- Avoiding the pitfalls
- Tax
- What the main taxes are
- Who pays them
- How income tax and national insurance work
- Saving
- Why to save
- When to save
- What to save for
- What to save in
- A quick introduction to pensions
- Benefits
- What can be claimed
- When to claim
- Getting help
- The importance of asking
- Who to ask
I have absolutely no doubt that this list can be improved, a lot. But what I am really looking for are ideas on what should be covered, and not the detail. And the aim has to be helpful and not to sell anything.
Comments welcome.
I am also thinking about what a course on finance for non-financial young people should include, but that's for another post.
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I would add house buying, they will need the knowledge at some point. I.e. solicitors & conveyancers, mortgages, lease v. freehold, leasehold traps, probably other topics.
Noted
Maybe after renting
This is excellent, Richard, thank you!
You probably have it in mind and already included under ‘Getting Help’. If not, maybe a sub-section ‘When to Ask’. It’s not always followed when people get into financial trouble … Earlier than later.
I am sure that compound interest is already in your mind. It’s so easy to fall for, but those bstrds that run doorstep lending reduce their borrowers to misery and abuse of all sorts.
You are nit alone in reminding me of the need to upgrade this
I do so wish we had had lessons about all this when I was at school, far more essential than algebra and trig, which was immediately forgotten the day I left and never used since in over fifty years. I don’t know if schools have anything like this nowadays, but they most definitely should.
They don’t
They should
And trigonometry? What was that all about?
“And trigonometry? What was that all about?”
Spoken like someone with no understanding of maths or science..Well without an understanding of trigonometry buildings, bridges, dams etc would just fall over!! .. it’s the basis of engineering, astronomy and this is just scratching the surface!
Of course I know that
But does the whole world need to know it?
Or does sixth form maths need to focus on it?
No
Medicine pretty much starts from scratch at degree level
So does economics, and law
So why require maths for a tiny minority to dominate?
And I got quite a good A level maths and likewise in stats in my degree, just for the record
… I suspect trigonometry goes back to the need to have people to navigate ships and calculate shells from cannons.
“far more essential than algebra and trig, which was immediately forgotten the day I left and never used since in over fifty years.” If you are not using something you are taught at school, the knowledge evaporates. And there are attitudes to school teaching on any subject, that downgrades its relevance. I think it’s probably more effective to make sure that every teenager/adult knows how to access unbiased facts, and how to judge the biased accounts they are more likely to come across. That is, expect people to learn after they have left school, as they need to know.
And financial best-advice changes. When my husband and I were buying a first house, in 1966, we were advised to buy the most expensive house we could afford, as inflation would eat away at the value of the debt over time. And get an endowment mortgage. Good advice then, and we did well by taking it. Not so good now.
True….
Under borrowing: Bankruptcy. Simply because if it all goes wrong there are still solutions which don’t entail feeling under lots of pressure. Also perhaps what lenders can (and can’t) do when they can’t receive. This is a source of much despair for some and I think knowing that there are limits would be very helpful.
Thanks
I teach citizenship KS3. We cover some of this but the problem is time. I have one lesson every 2 weeks. It’s a project in year 9 of which they have 3. So throughout kids schooling they are lucky if they get 6 hours on finance. A lot of schools don’t even teach it. It has gone the way of the visual and preforming arts.
Unite in Schools does some of the Student Voice / trad union stuff but of course it’s a tiny project which couldn’t run without the dedication of a few people who are volunteers. Still, there is learning there to be harnessed.
Thanks
I know the issues
My suspicion is that this might be online
Pensions or is that covered in Savings?
Probably the best advice I had soon after starting work in 1983 was to put £25/month into a pension. The most valuable thing I’ve ever done.
I’ve been lucky enough to work with employers who matched a percentage, and taken the view that only an idiot would decline extra free money. And that the basic state pension could only be bare minimum. So put away a percentage – 1 or 5 or whatever – and forget about it. Try to live as best you can on the rest. Let compound interest help you. Easier said than done of course.
Yes
Yes.
I am in the teaching profession and many are struggling even on the leadership scale. So wrong.
This appears to be mainly about personal finance which is fine. You could include discounts and net present value, and mortgages and compound interest.
But can you please include a very short piece on the difference between public finance (a nation, which can create its own money) and personal finance (the household), and the fallacy of composition. (The way we are wired as a species makes us prone to taking mental shortcuts, and fallacious overgeneralisation from the particular causes all sorts of problems.)
I think all that is stage 2….
Let me muse on this
I would also suggest teaching about government finances and macroeconomics.
I think that is in the next stage of the course
My head of department seemed upset when I said I couldn’t teach kids that tax payers pay for public services because they don’t. I focused on council tax to avoid confusion.
Good one…
I worked with a CAB in in the mid early 2000’s and used a lot of material with my kids about this but this looks more ordered and comprehensive.
Would something on how compound interest works be useful?
My son recently applied for his provisional driving license and by the ‘magic’ that is the internet (no doubt enabled by a transaction with said internet company so that this ‘service’ would come up first on the search) he was diverted to a ‘service’ that did the application for him and was charged £80+ for it. He realised he had made a mistake and had not gone to the proper website. We tried to get the money refunded but to no avail.
Modern capitalism eh? You can’t beat it.
Yes
I have had my sons conned in similar ways
Hence my concern
Nothing too bad – but it has made me very aware of this issue
Pensions were covered but the best advice I gave was to an young teacher: don’t regret what you pay for your pension (as she did). When you are 57 like me and still looking at another 10 years service it is worth it’s weight in gold.
Agreed
I began in my 20s – albeit very modestly
Like Kate above, I taught a little of this some 20 years ago but at KS4. A few topics were supposed to be covered in tutorial/ registration time. Most of the kids didn’t take it seriously as it wasn’t a ‘proper subject’.
The Curriculum was more constrained by the National Curriculum then-it is less so in Academies but that is not always a good thing. Dept. heads wanted maximum time for their subject and there were powerful voices for more IT or the constitution and some us argued for more emotional literacy.
There is less need now for GCSE as most do not leave education at 16. ‘Education’ has become, too often, the maximisation of ‘good’ GCSE grades to prove the school is ‘excellent’. I am still in favour of a broad education up to 16 and some subjects where the content-maths for example-seemed to be designed as a preparation for A level-except most don’t do that ( even if Sunak thinks hey should) We really need a re-design of secondary education and not one that is based on Mr Gove’s private school experience.
I think you are right to say it should be aimed at 16-18 (especially if Labour do give the vote to 16 year olds.) It might have to be done more on line due to a shortage of trained staff.
But it is necessary and I commend your idea.
16-18 is the place
Thanks
I have got myself going now…
Could I suggest 15 – 18 age group as some kids do still leave education at 16.
Maybe…but a big ability range there
I would add financial crisis and suicide support, such as Samaritans or Papyrus for younger people. In 2018 Samaritans published a document, based on their work, called Dying from Inequality. Over half of the suicide risk factors, from their research (and others), were financial, and many of the others were made much worse by having insufficient means (bereavement, divorce, moving home). Thoughts of suicide are common amongst people in debt, and with every uptick in interest rates, companies owed money are receiving more calls from people expressing thoughts of suicide (I work in suicide prevention). If more people knew how to navigate a crisis and what a crisis means, there would be fewer deaths by suicide.
Wow
I knew I would have missed something really important. You just hit the nail on the head.
Thank you.
I so appreciate that.
While these are what should be taught to young people, in reality most are skimmed over at best. As someone who took these lessons less than two years ago, only cash v card, some aspects of borrowing and the basics of renting were taught. Around 2hrs of teaching at most.
Thanks
I am hoping to promote something more robust
This may be covered by what to save in, but basic investment advice – I know quite a few people who “invested” in NFTs or Cryptocurrencies as savings or part of a “get rich quick” scheme and lost money because they didn’t realise they could.
I realised this morning that crypto definitely needs to be covered
Excellent blog Richard.
We have plenty of scope with the new curriculum in Wales and we shall lobby Welsh Government on this matter.
In addition, we would add the role of Credit Unions as practical means of self help, evidencing the benefits of active citizenship. Important to note that in Ireland CU’s have been enormously successful and without state subsidy for their operations – using selling of insurance as a cross subsidy.
We know Covid19 caused many if not all school Credit Union collection points to collapse during this period with not all restarting because of financial/ staffing pressures. However, School Governors could play an active role in supporting collection points and banking savings.
In England, Co-op Academies might be a useful starting point, if this is not already the case. (I could raise with my Co-op contacts).
If we are to take this blog forward it would seem essential that teachers in each of the four UK countries work collaboratively in preparing the necessary resources tailored to meet varied requirements. Changing, for example, the examination syllabus for awarding bodies would be a key issue.
Many thanks again Richard.
Credit unions need to be added
And the virtue of proper building societies
Double entry bookkeeping. I know you may object; but it is is how Mehrling has taught undergraduates monetary economics.
Definitely not in the basics course
This course would be hugely beneficial for many adults as well, as there’s so much ignorance on these topics. But I agree it’s more important for the young, so as to get them off on the right foot.
I would love offer it as a certificated course
As an employer I would be impressed, as I was by music exams (the most stressful experience I ever put myself through )
Banking and how it works.
My parents worked in a bank, ok a very long time ago these days and it all sounds very very weird, overnight houses, that kind of thing
Not for the basic course
You should include a section entitled:
‘Emergency Toolkit or what to do when things go wrong’
Get help ….. in other words
Mortgages – difference between capital plus interest repayment and interest only – dangers of interest only. Difference between freehold and leasehold. warn about leashold rip off of increasing year on year.
Debt management – repayment plans where interest is stopped on card and bank loans, debt smanagement plans working out income and expenditure,and realistic repayments of debt.. Advice centres such as CAB………..
But not for 18 year olds. Maybe
But definitely for stage 2
I see a range of courses could be needed
The savvy consumer section definitely needs content that will refer back to cognitive biases that are commonly exploited (sunk cost issues, being hurried into ASC’s, deference to apparent expertise, fear of feeling stupid …).
What is an ASC? Right now I have no idea ….
Sorry -too many TLAs around with those letters. ASC’s are “altered states of consciousness” -referring in this case to the way that interactions can be ‘designed’ to alter the mindset of the ‘mark’ /customer to make them more amenable to making less ‘measured’ decisions.
What are other people already doing in this space? Some examples.
* https://themoneycharity.org.uk/advice-information/
* https://www.libf.ac.uk/study/financial-education/qualifications/lessons-in-financial-education-(life)
* https://www.hsbc.co.uk/financial-education/
What works and what does not? Is there an opportunity to work together rather than reinventing the wheel?
This too
https://www.young-enterprise.org.uk/teachers-hub/financial-education/resources-hub/financial-education-planning-frameworks/
There appear to be some overlaps
How about Value For Money?
When purchasing something:
How long will it last?
Do you need the money for something else?
Will it have resale value?
Etc.
All relevant
Can you hurry up, please. My granddaughter starts A level maths in September.
Or if you can’t, can we test some out on here?
Maybe….
As money is usually involved in purchase and sales a little bit contract law might not go a miss.
Great idea. Used to do this on Wed morning 6th form in the 90s, along with First Aid, survival cooking etc. I’d like to see ‘myths told by governments and media’.
What are the debits and credits involved for each government or Finacial institution (Bank of England and commercial banks) that ends up with my bank account (with a commercial bank) being credited with my state pension (or any other state benefit for that matter). In reverse, starting with say the debit that is created to pay something like road tax, what are, and where do the intervening credits and debits that pass through to ensure the Govt gets the ‘benefit’ of the credit.
One of my favourites is to ask anyone who has a credit balance and an ATM card, if they have at anytime tried to withdraw cash using their ATM card but was refused the withdrawal because told them their money was being used by someone else who had borrowed it. I then tell them to read the Bank of England’s quarterly brief about money creation by commercial banks. I’m so much fun at a party.!
You can search that on this site – search double entry central bank reserve accounts
Definitely a necessity for anyone really, perhaps also cover how to manually calculate compound interest and simple interest with difference in advantages/disadvantages between them.
Great list – this is so needed.
I would add:
Consumer rights
Betting & gambling
Direct debits (bank account vs credit card ones) & standing orders
The Church of England run an excellent money skills course https://capuk.org/get-involved/become-a-church-partner/run-the-cap-money-course – maybe compare notes?
Keep up the great work!
Thank you
Martin Lewis has also done work in this area
https://www.moneysavingexpert.com/news/2021/10/first-ever-financial-education-textbook-arrives-in-welsh-schools/
I was looking last night
I can’t work out why he pitched it at 14-16
That seems too young to me
The difference between employment and self-employment. Let 18 year olds know that starting their own business is an option over University or employment.
I agree
I discussed this with a young self employed person yesterday, who admitted she is terrified of HMRC
Young people, all people in fact, need to be trained in controlling fear. This is because fear, especially in relation to financial debt, will be used against them to try to get money out of them. It’s a very potent tool especially when wielded by people who know it’s the only tool they have and are good at using it.
Agreed
Great idea and topics!
What about Crypto/Bitcoin and Gambling? I think a basic understanding can help to combat the hype and adverts.
BTW I try to spread the word but find it very difficult to share your posts. Don’t know if I’m missing a trick but I always end providing a link to the main page.
Thanks
At the bottom of each post there are a range fo sharing buttons – one of which is an email symbol
I just checked and it works for me….
I use Chrome and gmail
* Filling in the simplest tax return. (Accountants make it complicated because they believe it’s a legal requirement to minimise your taxes)
* pyramid schemes and how to recognize them. (Is cryptocurrency any different?)
This proposal should all be worked out and ready for the next time Rishi Sunak proposes his not-thought-through maths education policy, and he might grab for it instead. Or maybe Starmer might pick up on it as a come-back and put it in the manifesto. It’s catchy enough for an attention deficit politician to get, but it would stick because it is substantive.
I remember when Ed Milliband proposed school careers advice service in 2015, which would have been really interesting because to do it they would have had to research what jobs and skills might be useful in 20 years time in order to back up the advice.
This is a really good idea even for people in their twenties and thirties.
Two things strike me: it needs to be written with as little financial techno jargon as possible – I don’t doubt you already have that in mind. I only reiterate it here because even though I have two degrees and a high IQ, much of what is written about money and finance is done so in the passive and uses lots of terminology that assumes prior understanding.
That’s why it takes me an hour sometimes just to make sense of a short blog article. I have to look up there terms and go back and forth. It’s like reading a yo-yo.
And that’s why I started my blog. To simplify things.
Secondly, I think it would be well worth putting some brief explanation and links in about the cognitive biases we have around money and value because all the best advice in the world could be undone if you don’t realise that, for example, our tendency to value things more that we perceive as being scarce will influence what we are willing to pay for something and even our desire for something, whether we need it or not.
A good resource is this website:
https://www.coglode.com/nuggets/scarcity
https://www.coglode.com/nuggets/loss-aversion
Kind regards,
Lee
I stress, I am not necessarily thinking of doing this
I plan to suggest where the money to do it might come from
A lot of work has gone into that site
The coglode site you mean? Yeah. It’s a great resource. So insightful.
Just kept getting sent round and round in circles on that Coglode site. Just seemed to be for selling to and manipulating people. Didn’t see the point in this context.
It is overly complicated
From ‘personal finance ‘ discussions when my children were 16-19: Understanding a wage slip, P60, P45. Dangers around ‘easy’ credit, interest on debt/borrowing …..and crypto/trading/gaming/gambling. Bank apps, for youngsters the gateway to budgeting and saving and borrowing. Your consumer right, especially when buying online . Something around people’s very different emotional relationships with money is important as it can be highly related to upbringing and the subject of money is surrounded by taboos. University can be a massive eye opener on money (and equity).
Thanks
Perhaps a piece could be included on how banking functions to extract wealth from the broader community with a view to educating people about the benefits of prudently run area banks. Being a long-time Ellen Brown fan, I’m still annoyed there’s no local banking solution here in leafy Surrey. When I bring the subject up on local area media I’m met with blank incomprehension and total disinterest, a situation which frustrates me but would no doubt have banking magnates rubbing their hands together and chortling with glee. Education on this subject’s desperately needed. Sadly those who need it most appear to understand it least.
More Banks of Dave?
Don’t have Netflix, but I’ve noticed that the film with Rory Kinnear has been up for seven awards.
After reading through all the suggestions it looks like you have to set up a team to research and write and update all this stuff. When, in what feels like a previous incarnation, I was a graduate student working for a DPhil I mentioned to my supervisor that there must be problems that although seeming simple in the end require you to cover the whole discipline to resolve. We have such here.
I am not wholly sure I am following your logic
I meant – first it seemed you wanted to help young people understand personal finance so they didn’t get cheated or make other avoidable mistakes. Of course you need to know how that connects to the wider financial system, but not in detail. I could see that as fixing 99% of problems that people have with money. If you add in all the suggestions then the exposition become global and detailed. This is the research project that ultimately covers everything. Labyrinthine like the stories of Jorge Luis Borges. My own add in would be ethical investment.
I am sure what you produce will be useful if people can be induced to study it.
Understood now
What about credit ratings? Some of my daughter’s friends are obsessed with them and aghast that she doesn’t know her own score.
I don’t know mine….