In order to financially educate young people to increase their understanding of finances and the practical implications for everyday life, children need to learn from their parents or at school.
In order to financially educate young people to increase their understanding of finances and the practical implications for everyday life, children need to learn from their parents or at school. There is a lack of financial education in schools both formally - it is not on the curriculum – and informally. A number of charities are going into schools to offer financial education in an effort to fill this gap. For example, Martin Lewis has paid for a text book to go into senior schools but the constraining factor is that if a subject is not on the curriculum, there is very little available time.
It is difficult to engage children in understanding the value for money, particularly as we live in an increasingly cashless society. Financial literacy in the UK is below the OECD average which is part of the reason we have such a high level of debt. The relationship between consumerism and saving is largely broken. There is a need for us to emulate the Jamie Oliver approach to educating parents about food. Parents’ behaviour heavily influences their children’s attitudes to finance. We must strive to eradicate the financial ‘turkey twizzlers!’
Many financial organisations are keen to help, for example, building societies and some banks (the Bank of Ireland has a ‘financial well-being’ programme). Incentives, nudges and ‘opt ins’ rather than ‘opt outs’ seem to work.
There are about 80,000 children on Rooster. Parents often transfer pocket money to children on the App. About 30 of these actively save their money and about 14% make donations. Rooster did explore introducing gamification but it seemed to make money less real to children so they now avoid it. 700,000 families use Rooster, mainly in the UK and USA with less in Australia.
‘GoHenry’ App is similar and also popular with children and parents.
Our conclusion was that it is essential that we strive to educate children further in financial matters.
Expert: Will Carmichael – RoosterMoney
Facilitator: Colette Dunn – Milliman UK