By Sharon Davies, CEO of Young Enterprise
Today, the level of financial capability in the UK is falling short of where it should be. In fact, only 38 per cent of children receive some form of financial education in school and, according to Santander UK, two-thirds of young people believe that a lack of financial education has led them down the path to debt.
Financial education has the ability to equip young people with the confidence and skills they need to build their futures, open the door to a world of opportunities and transform their lives. Therefore, we need to see greater collaboration between schools, the third sector, government and employers to help people build a healthy relationship with money from a young age and establish a generation of financially capable individuals.
Today, young people are growing up in a rapidly shifting financial landscape. Aside from deciphering which saving programmes and financial products best suit them, they are also having to recognise the threat of online scams, financial misinformation on social media channels and cryptocurrency adverts that appear to be endorsed by their favourite celebrities. That’s why it is essential that young people are equipped with the knowledge to navigate these challenges.
Empowering young people now and for the future
According to research, children begin to develop their mindset around money habits between the ages of three and seven. Therefore, despite financial education not being part of the curriculum, it’s crucial that we educate children around money and finances while they are in primary school.
This can include learning about the different ways money can be earnt, the importance of being able to budget and save money, and the best routes to borrow or make investments. Moreover, developing an understanding of the real-life implications for personal debt and how to navigate taxes will help individuals form a deeper, more practical financial mindset from a young age.
Empowering children with the tools and awareness to make informed financial decisions will not only better prepare them to deal with the everyday facets of life but will also help them to plan for their future, particularly as they approach the world of work.
The first significant financial decision many young people will make is deciding whether they should continue to further their education beyond their school years. Having a sound financial education to draw from can help individuals make informed decisions and increase their opportunities, by empowering young people with the confidence to thrive in their choices.
Opportunities for the wider community
Prioritising financial education can also open up significant opportunities for schools, teachers and the wider community.
To start, shaping conversations about money and finances around relatable examples and practical scenarios will help young people engage more with their learning. In fact, according to a recent survey Young Enterprise conducted with teachers, 96% agreed that being able to apply learning in real-world contexts is important.
Moreover, structuring the learning framework around personal development subjects can help students to develop into well-rounded individuals who are equipped to pursue financial goals and provide a positive influence on their local community.
Most importantly though, financial education can form a core part of school safeguarding. By providing a financial education from a young age, schools and teachers can help support students to gain the tools they need to protect themselves from financial harm and reduce stress and anxiety in an increasingly technical world. This is crucial at a time when 6 out of 10 young people report that the Covid pandemic has made them feel more anxious about money.
A united approach
Learning about money from a young age can positively influence financial futures and has the power to transform lives. That’s why it is essential that we prioritise financial education and provide the necessary support to enable young people to develop and sustain this core life skill.
However, these measures should not be left to teachers and schools to implement on their own. Instead, we should look outside of the formal education environment and support parents, carers, youth workers and communities to financially empower young people.
At Young Enterprise we are passionate about developing the financial capability of the next generation of young people and bridging the current gap in knowledge, skills and mindset. That’s why we launched “My Money Matters”, a digital programme designed to help young people thrive in today’s society and develop a positive mindset with money. Through impactful insight into relevant topics such as cryptocurrencies and the shift towards a cashless society, the programme can help to break down the current financial barriers and support young people to leave school with the knowledge, skills and mindset they need to make positive financial decisions.
