Invest wisely in financial education
Young people tell us that they need to know more about money before they leave school. They recognise that being prepared to face the financial challenges that lie ahead is something that schools should prepare them for. Young people are not alone in this; most of the adults that I speak to recognise the importance of financial education. While it is possible to argue that you only appreciate the need for knowledge and skills when you come across situations in life after school, that is not the view young people take.
Naturally, schools place considerable importance on subjects and exams and, writing as a parent, I am glad that they do. However, most teachers and parents recognise that there are also important overarching purposes for the curriculum and all schools should be committed to addressing these too.
There are three main reasons why financial education should be seen as an important part of school education in preparing young people for life now and in the future. The first is economic. The job market has changed and young people will face many career changes in their lifetime. Part-time work and short-term contracts are much more common in an economy that is more service driven. This means that people need to be much more sophisticated in their use of money.
Second, social changes make financial education more important. The acceptance of credit and debt and the crisis that this can bring about means that young people need to be aware of the financial and economic decisions that they have to make.
Closely linked to this is the power of advertising and peer pressure - young people should be aware of the methods used by advertisers to make them part with their money. Advertisers are good at getting their message in early - if you need convincing look at some of the adverts on children's television. Financial education is an important aspect of personal and social education.
The third reason why financial education is important is political.
Taxation will always be an issue. The Scottish Parliament has the power to increase or decrease income tax up to 3p in the pound and at present there is real controversy over the fairness of the council tax. Many people vote on the basis of how well off they are. Students have the added burden of loans and fees to deal with.
Financial education is a significant part of education for citizenship.
Schools have always recognised the importance of financial education but, within current curriculum structures, do not always find it easy to manage, especially in secondary schools. Because financial education is important for everyone, it needs to appear in the core of the curriculum.
Mathematics, personal and social education, language and possibly religious and moral education can all make a contribution. For example, most teachers of mathematics recognise the importance of financial education and focus a number of lessons on what may be described as "social arithmetic". They see this as developing an important life skill, arguably more important for many of us than the intricacies of differentiation and integration.
Other subjects, such as home economics and business education, can make a significant contribution to financial education, but only about 25 per cent of young people study them. Encouraging a positive attitude towards learning about money can start early and primary teachers can make a substantial contribution, for example through the people in society component of environmental studies. Connections can also be made through numeracy, language, enterprise in education and education for citizenship.
Young people can develop financial capability through being involved in enterprise projects, and education business partnerships can help. Charity or fundraising events such as Red Nose Day and Children in Need are excellent ways of developing financial capability, and realising that your financial decisions can make an impact on others is an essential part of education for citizenship.
I am fully aware of the difficulty in adding to an already overcrowded curriculum. However, all our efforts at the Scottish Centre for Financial Education aim to build on existing practice. The remit of the centre is to help local authorities, schools and teachers provide high-quality financial education for all their learners.
We are doing this by learning what schools are already doing and sharing good practice, providing opportunities for continuing professional development, developing focused resources such as Talk Money, Talk Maths (to be published soon) and working with others who have an interest in financial education such as the Financial Services Authority, the Personal Finance Education Group, high street banks and credit unions.
Jim Lally is director of the Scottish Centre for Financial Education, based at Learning and Teaching Scotland.