Financial Literacy Should Be Taught in Schools – Conservative Article
Money impacts absolutely everyone. Everything has a price and everybody is subject to that condition. We live in a world that is run by money, yet financial literacy is not prioritised in our education. As someone who firmly believes in meritocracy, I do not see how the lack of focus on financial education in the U.K National Curriculum can lead to those opportunities. Financial literacy is essential for all. So many financial issues could be prevented if the population were introduced to financial education from an early age.
Finances are ultimately unavoidable, so we should be taking a lot more responsibility for it through our educational system.
As it currently stands, the National Curriculum in the U.K has made 12 subjects compulsory throughout key stages 3 and 4. These subjects are English, Maths, Science, History, Geography, Modern Foreign Languages, Design and Technology, Art and Design, Music, Physical Education, Citizenship and Computing. Alongside these compulsory subjects, it is also compulsory to teach Sex and Relationships Education and Religious Education. These subjects do not require examinations.
As of 2014, financial literacy has been a component of Citizenship in the National Curriculum. I, however, believe that financial literacy should be its own individual subject.
Sex education and religious education are exceptionally important components of a child’s education for a myriad of reasons. They come up in everyday life once a child leaves school. Having a firm understanding of reproductive biology is essential. Having a greater understanding of the various cultures that make up the melting pot of cultural diversity that is the U.K is very much needed. These aspects of life affect everyone in some way. So why is financial literacy not held to the same standard? Placing financial education underneath the subject of Citizenship takes away from the importance of financial literacy. Additionally, it gives teachers room to avoid the topic in any detail at all, limiting the education of their students.
The demand for financial education exists too. Students want to learn about financial products and budgeting. They want to be taught about debt management. Forbes have stated that “More than half (51%) of millennial respondents surveyed that they feel their level of personal finance knowledge is holding them back from making financial progress”. If we do not start implementing financial literacy into our education soon, there will be more generations to come that will feel the same way.
In the U.K, 82% of students want more financial education at school. 77% of students yearn to learn about budgeting. 73% want to be taught about debt management. Importantly, 60% believe that financial education should be a separate subject.
The desire is there, yet the National Curriculum does not reflect this.
“Nearly three-quarters of young people in the U.K say they get most of their financial understanding from their parents and other family members”. This statistic is shocking, especially when considering the lack of financial education that generations before have endured. If we continue this chain of placing sole responsibility on parents and families to educate their children in finances, then there is very little room for social mobility and meritocracy. Places of education should not have complete responsibility in teaching children financial literacy. As it stands, however, they do not have any at all. “Just 8% of young people [have] said they learned the most about money skills in school, and 17% said they were self-taught.” The National Curriculum does not reflect the desire and need for financial education. Young people do not feel supported when they enter adulthood as a result.
An increase in financial debt in the U.K may even reflect the lack of financial literacy amongst young people. Between April 2014 to March 2016 and April 2016 to March 2018, there has been an increase of £12 billion (11%) in total financial debt. Financial debt is made up of credit cards, loans and other non-mortgage debt. These are all components of financial literacy that should be taught in schools to prevent such high levels of debt.
Nearly three-quarters of children are learning about finances from their parents, and we have increasingly higher levels of financial debt in the U.K. We are promoting a chain of more and more generations of financial struggle. This could all be prevented by a proper financial education.
We cannot claim to be a society built on the foundations of meritocracy when the majority of the population does not receive a solid financial education.
“Creating a financially literate community is a long-term agenda”, but the starting point certainly lies within the National Curriculum.
Written by Senior Conservative Writer, Rebecca Selt
Point of Information
There are far better solutions out there – A Labour Response
I don’t disagree with teaching financial literacy, in principle. I think that financial literacy can be a useful skill to have for someone who is already living comfortably and wants to start saving money or budget better. This, however, is very different to suggesting that financial literacy will have any tangible benefit to social mobility and meritocracy. You can give people all the knowledge in the world about how they can arrange their own finances, but it won’t make them any better off.
I like Rebecca’s point about the demand for financial education in schools. This is, of course, a great reason to provide such an education as it is something that children have a clear desire to learn about. There are also clear practical applications of that knowledge in the real world. For me, this justifies its inclusion in the curriculum. What does not justify it, however, is the notion that “so many financial issues could be prevented” were this to be implemented. There is very little to back this claim up.
Besides, it assumes that the only thing holding people back from a comfortable life is their own lack of knowledge. This narrative that poverty is inherently due to the shortcomings of poor people is sadly reminiscent of Thatcher-era politics in which poverty was viewed as a “personality defect”. We have to stop blaming poor people for their own poverty.
In reality, financial literacy is a minor solution to a far greater problem. Recent evidence suggests that it would be largely ineffective anyway. One study found that inducing thoughts about finances in poor people led to a reduction in cognitive performance. This was due to the strain that poverty takes on one’s mental resources due to factors such as stress. Essentially, this means that financial literacy is a minor concern for anyone who is already occupied with worry about how they will survive in the short term.
The final point that I wanted to pick up on was where Rebecca mentioned that expecting parents to educate their children on finances would leave little room for social mobility and meritocracy. This is a complete fantasy. Financial literacy is a small hurdle in a race otherwise littered with 40ft high walls for the poorest in society. It is not their lack of knowledge holding them back, it is their lack of cash. Financial literacy is a useless skill if you live hand-to-mouth. It is akin to providing someone whose house is burning down with a manual on how to blow out the candles on a birthday cake.
I think that before we can begin to focus on financial literacy as a necessity, maybe we should focus on lifting people out of poverty. Only then is it worth spending the time teaching people how to manage their finances. At the same time, let’s stop blaming poor people for continuing to be poor. “Poverty is not a lack of character. Poverty is a lack of cash”.
Written by Senior Labour Writer, Jack Rolfe
Financial Literacy is useful, but it can’t work miracles – A Liberal Response
Financial literacy is clearly a core life skill, as Rebecca perfectly illustrates. Money, quite literally, makes the world go around. Therefore, being able to manage it better will certainly make life a little bit easier. The OECD, for example, has suggested that financial education can “empower and equip young people with the knowledge, skills and confidence to take charge of their lives and build a more secure future for themselves and their families”. Consequently, I agree that we should teach financial literacy in schools as it will definitely prove to be beneficial. Unlike Rebecca, however, I am not convinced that we need to dedicate a whole subject to it. But it certainly could do with greater emphasis within Citizenship lessons.
That said, Jack is completely correct by arguing that financial literacy will not bring about social mobility or a perfect meritocracy. I feel Rebecca has far too much faith in it. At the end of the day, if someone has very little money, no matter how cleverly they manage their finances, they will still be left with very little money. Financial literacy cannot work miracles; it cannot make a fortune out of nothing. And it certainly won’t prevent poverty.
All too often poverty is painted out as the fault of overspending or poor financial decisions which, as Jack highlights, is simply not the case. The issue goes so much deeper than this. Therefore, this paternalistic attitude that providing a better financial education will help solve these issues is both archaic and simply incorrect.
Yes, financial education is obviously important, I do not disagree with Rebecca. But it is important to be realistic. It will not be much solace to people most in need financially. Therefore, I agree wholeheartedly with my Labour colleague on this one and have nothing to add to his argument.
Written by Senior Liberal Writer, Beccy Reeves