Need for new know-how to stay clear of debt

Earlier this year, debt charity StepChange reported that the average payday loan debt of clients under the age of 25 was #163;1,375 in 2012 - a rise of #163;500 in two years.

Despite announcements this week that unemployment is now the lowest it has been in three years, debt and poverty are a reality of everyday life for many Scottish children. Thousands of families are suffering from the effects of the economic recession and financial exclusion.

So it is not surprising that teachers and government want to make sure the next generation leaves school well prepared to avoid debt and manage their own finances. Achieving that goal, however, might be more difficult now than it has ever been before.

Advances in technology and the rise of credit cards and online retailers have made money an increasingly abstract concept. The world of personal finance is no longer dominated by the exchange of coins and notes in return for goods and services. Instead, transactions are increasingly turning into touch-of-a-button manipulations of remote, virtual accounts.

The traditional approach to financial education, centred on numeracy and the technicalities of personal banking, such as opening a bank account and filling out a cheque, is no longer sufficient to meet learners' needs.

Financial education in schools has to prepare children for the risks created by modern technology - from online gambling to games with expensive add-ons and even mobile phone apps that allow access to payday loans at the tap of a finger.

The consequences of a lack of resilience in this field are dramatic. At last year's School Leaders Scotland conference, anecdotes were exchanged about young people using payday loan apps to supplement their finances on a night out with friends without considering the huge interest attached or realising that they would need to pay it back in the future.

A lot of work is being done in schools and by Education Scotland to reform financial education and focus on economic well-being. "Money weeks" take place in schools - and even nurseries - across Scotland, and new resources are being created to help teachers deliver relevant content.

But with most classes involving at least some children affected by the problems that teachers are trying to help them to avoid, care will need to be taken not to stigmatise those children most reliant on support.

Enterprise projects such as Micro-Tyco, previously featured in TESS (7 September), and the pound challenge at Duddingston Primary are just two of many ways to help children manage their finances in a world where it is all too easy to spend money.

Julia Belgutay, TESS reporter,

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