Money in mind
Financial education could be seen as the perfect content area in the new age of Curriculum for Excellence. It can bring together almost all subjects from numeracy to literacy, politics and business studies, and lends itself easily to cross-curricular projects around fair trade or entrepreneurship.
It is also a subject with obvious and constant links to the "real world" and therefore offers relevant experiences and outcomes at all stages.
Put simply, "money is the best interdisciplinary subject", according to Jim Lally, education officer for financial and business education at Education Scotland.
This is certainly one reason that teaching about money has become more of a focus in Scottish schools in recent years. Some local authorities have declared it a council-wide priority.
But it is not the only reason, of course, when the country is battling through a lengthy recession. Children and young people face an entirely different environment from the generations before them, and equipping them with the skills to understand and manage their finances has never been more important.
As such, financial education is about a lot more than how to look after money, open a bank account and fill out a cheque. It must also focus on finance management and the wider economic environment.
And it is not only these two strands that make financial education more prescient - innovations in technology have turned money into a more abstract concept for many students. From an early age, many children are introduced to internet banking and online shopping. Even in the lunch queue at school, they often no longer need cash, but instead pay with a card.
There are now also mobile apps for services such as gambling or taking out payday loans, said Mr Lally.
"With things like apps, money has become an abstract thing, and it has become much more difficult for people to manage," he said.
The connection between employment, income and consumption has also been blurred, Mr Lally said. Indeed, TESS reported last year that children and young people often lack a realistic understanding of their potential earnings.
In the Royal Bank of Scotland's MoneySense survey, teenagers said they believed that they would earn pound;54,000 by the age of 35, despite the UK median salary at the time for 30- to 39-year-olds being less than half that.
Even among adults, knowledge of credit and loan-related issues is often also lacking and financial education will have to combat this in future generations.
A survey by confused.com, cited by money education charity Credit Action, showed that 27 per cent of credit-card owners did not know what the term "credit rating" meant.
Almost one in five credit-card owners did not realise that missing payments on credit cards could potentially affect their credit rating, and only a small number were aware that this could also be affected by using a credit card for online gambling and taking out a payday loan.
The current economic climate and the financial situations in which many families have found them themselves also significantly affects what financial education needs to cover and achieve, and has helped to move the subject further into the spotlight.
This is especially true for children. The global recession has hit young people "as hard as any other group in society", said Louise Macdonald, chief executive of children's charity Young Scot. It is therefore "vital they are able to make informed decisions and choices so they can access financial services and products with confidence, manage their money better and don't find themselves with levels of debt they can't control".
She added that government reform of the welfare system would bring "a host of new challenges and questions, making it even more crucial that young people are able to access information and support on financial capability".
Debt is indeed already a reality in the lives of many children, with child poverty exceeding 40 per cent in some Scottish constituencies.
As they get older, unemployment becomes a crucial issue, and schools must help to prepare them for the challenges it can bring at a time when many still feel under pressure to maintain a certain standard of living and "keep up" with their peers. More than one in five 16- to 24-year-olds were listed as unemployed in the most recent figures available from the Office for National Statistics (October 2011 to September 2012).
Research by the debt charity StepChange earlier this year showed that unemployment is a significantly greater cause of debt problems for the under-25s than for any other age group. Last year, 34 per cent of the 22,262 adults under the age of 25 seeking help from the charity said that unemployment was the reason for their debt problem.
"The under-25s face a toxic combination of high unemployment and rising living costs, combined with the fact that access to credit is much tighter than was the case a few years ago. The result is that they are increasingly struggling to meet the basic cost of living and so inevitably fall behind on priority bills such as rent, council tax and energy bills," a spokesman for StepChange said.
Analysis by the charity published in March showed that a larger share of that age group were in council tax, gas, electricity and water arrears than of any other age group. And despite tuition-free higher education for Scottish students, an NUS Scotland survey in 2010 on student finance showed that many struggled to make ends meet while they were still in the education system.
Half of all students in the survey had borrowed from commercial sources, and 53 per cent of higher education students had commercial debt at the time of the survey.
More than half of all students had asked for loans from friends and family, and more than two-thirds of HE students felt that they did not have enough money to concentrate on their studies.
Parents are particularly concerned about their children getting into student debt and are calling on schools to up their game and work with them to inform young people.
Eleanor Coner, information officer at the Scottish Parent Teacher Council, said: "I think parents are worried about how their children will ever be able to afford to live on their own and the dangers of credit cards and how easy it is to run up massive debts."
The fact that debt was "no longer something of which to be ashamed" and people being used to getting what they want, even if it required borrowing money, added to the problem, she said.
As part of this development, highly risky payday loans have become a huge issue for young people.
"There are efforts already under way by MSPs to address the problem of companies which prey on students struggling with debt, and we look forward to working with them to protect students from those who would seek to profit from their financial hardship," said Gordon Maloney, NUS Scotland vice-president for communities.
"Payday loans and other forms of high-interest commercial debt are a dangerous trap for students who are struggling to pay their bills and remain in education."
With other methods of securing credit less readily available, payday loans had become "the only way to make ends meet for a number of young people", the StepChange spokesman agreed.
Forty-two per cent of StepChange clients under the age of 25 had payday loan debts in 2012, the charity's research showed, and these loans had become the third most commonly held debt among 18-25s, behind credit cards and personal loans.
Michelle Highman, chief executive of Credit Action, which delivers financial education and supports schools in England, said young people now need a better understanding of financial products and personal finance and to develop the attitudes needed to stay on top of their finances.
But teachers are often not equipped to deliver those lessons, she said: "They are human beings and often don't manage their money that well, either," she added.
But Ken Cunningham, general secretary of School Leaders Scotland, said that teachers and school leaders "had woken up to the reality of financial education in the world in which we live. That includes all the big-picture issues as well as the smaller personal issues."
There were indeed "lots of good examples" in schools where financial education has become part of the curriculum," Ms Coner said.
Education Scotland, along with a number of partners including banks, local authorities, building societies and debt charities, has been at the forefront of changes to the focus on financial education in schools.
"Financial education today is more than I used to teach - which focused on direct debits, standing orders and cheques," Mr Lally said. "Debt is a real driver, but there are also really positive aspects. Everything to do with fair trade is part and parcel of financial education. It is important that young people recognise the impact of their financial decisions on other people. And what young people also need to be aware of is the impact of other people's financial decisions on them."
New resources have been developed for schools and a financial education forum has been formed, with members including representatives of building societies and banks, local authorities and other organisations. It meets regularly and discusses current issues to ensure guidance on financial education takes those into consideration.
The teaching of the subject now starts early - sometimes as early as nursery. "Financial education should start in primary or even early years - that way you also get parents and carers (involved). It is fundamentally about changing attitudes and behaviours," Mr Lally said.
A Scottish government spokeswoman agreed: "We recognise the importance of ensuring young people gain an understanding of personal financial issues from an early age. That is why we are already working with a range of partners to ensure lessons in financial education are delivered through Curriculum for Excellence."
Kevin Brack, principal teacher at Duddingston Primary in Edinburgh, said the work going on in Scotland now was "probably further down the line" than in some other countries.
"It is a difficult economy out there - it is a difficult job market. Twenty-first century young people need all the skills at their disposal," he said.
Last year, Mr Brack's school held a focus week, which included talks from parents on their work in financial services, as well as enterprise experiences such as a pound challenge for P6-7 which challenged each child to raise as much money as possible from a pound.
On the concluding Friday, the school held a financial education open morning, with stalls showing off all the work done in the school during the week to parents and the local community.
"After our financial education focus week, we presented at a City of Edinburgh network meeting and 20 schools signed up to use our resources and take financial education forward," Mr Brack said.
He said that the financial exclusion faced by some students' families was something teachers had to be very aware of, but "the whole point is to give children the tools to be included and no matter if in an affluent area or a deprived area, they need the same tools".
Using financial education to prevent future generations of financially excluded Scots is also the aim of a council-wide strategy at West Lothian Council.
Education officer Jan Ingram told TESS that the local authority had made financial education a priority as part of its anti-poverty strategy and had been holding an annual "money week" since 2011, among other related events.
Last year, most schools in the authority got involved with the project, in which they were able to plan and carry out their own activities around money and finance management. Many involved local businesses, community organisations and even banks.
"What has made it work so well is that it is part of a council priority and part of a council strategy," Ms Ingram said. "It is about children getting experiences in schools and going home to share them with their parents.
"A lot of schools were already doing things to do with financial education, but we have tried to raise the profile and the expectation for schools to get involved."
She said that the promotion for the project had begun in the spring and information about good practice across primary and secondary schools was spread through subject networks and council newsletters.
There was sometimes a challenge for teachers to stay abreast of developments in the world of finance and technology, and so the council had "really expanded the partnership with Education Scotland to deliver (continuing professional development)". "We gave lots of opportunities for teachers to get up to speed and we are continuing to do that," Ms Ingram said.
She said the aim was to make progress towards eradicating poverty in the area.
Mr Lally agreed: "Financial education has to be positioned around economic well-being," he said. "Any contribution we can make to that will have a benefit for all aspects of health and well-being."
SOME KEY STATISTICS ON DEBT
pound;166m - The daily amount of interest paid on personal debt in the UK in February.
pound;1.4 trillion - The outstanding personal debt in the UK at the end of February.
pound;5,998 - The average household debt in the UK (excluding mortgages) in February.
pound;3,218 - The average consumer borrowing (including credit cards, motor and retail finance deals, overdrafts and unsecured loans) per UK adult in February.
277 - The number of people in the UK declared insolvent or bankrupt every day (based on Q4 2012 trends).
84 - The number of properties repossessed every day in the UK (based on Q4 2012 trends).
28m - The number of plastic card purchase transactions made every day in the UK in January.
pound;1.37bn - The total value of those transactions.
pound;55.3bn - The total credit card debt in February in the UK.
43% - The child poverty rate in Glasgow North East, the Scottish constituency where child poverty is most prevalent.
(Source: National money education charity Credit Action debt statistics, April 2013)
pound;54,000 - The salary Scottish teenagers expect to earn by the age of 35
Source: Royal Bank of Scotland
LISTEN UP AS MONEY TALKS
The interactive Family Finances resource can be used from primary school. It introduces children and young people to the Christie family - drawn by graphic novel creators Metaphrog.
The resource gives an insight into the finances of mother Janet Christie, a dental receptionist, father John Christie, an IT specialist, their children Jenni, Kenny and Sally, grandmother Granny Christie and aunt Barbara.
A detailed bank statement and personal profiles on each family member, including qualifications, skills and characteristics, allow children to analyse how the family spends its money, whether any savings are made, and how the members of the family and their finances are interconnected.
The case of the financially excluded Barbara, who is described as "unemployed, finds life difficult", enables the introduction of issues around debt, benefits and financial dependency.
According to Education Scotland, the resource "addresses the money experiences and outcomes within numeracy across learning and the skills development in Building the Curriculum 4".
"Money Talks: Family Finances has been designed to be as versatile as possible, offering the option of delivery in a linear or non-linear way, by individual teachers, teams of teachers and business partners as an inter-disciplinary programme, as the basis for a money week, or it could even be used as a transition resource involving primary staff, secondary staff and other partners," Education Scotland said.
Money transactions with hyperlinks to a wider range of financial education resources complete the resource, which is available from Education Scotland. There are plans to make it available online in time for next session.
Original headline: Financial savvy for all ages could pay big dividends