EDITOR’S BLOG: What’s so hard about our money?
Another week and we have another official report saying that we are useless when it comes to understanding our money.
This one has been produced by the Department for Education and Skills (DFES) and focuses on young people and their woeful ignorance of what that folding stuff in their purses and wallets is all about, and how you make it go further in the pursuit of health, happiness and the latest computer war game.
For example, 40% of them did not know what APR meant (email me on the site below if you’re struggling here) and 25% thought that store cards were better value than credit cards – if you can honestly believe that.
The fact that many store cards charge higher rates of interest than Mafia loansharks seems to have escaped the little darlings and you have to worry about how they will get on when they’re out in the big wide world and flashing the cash for themselves. I bet the stores can’t wait.
To counter this lack of basic knowledge, the Government has come up with an initiative (which is what a Government basically does for its living) called Talking Money, a scheme aimed at schooling the tykes in the niceties of saving and investment and making the most of their dosh.
“Talking Money is designed to raise awareness of the fact that financial help is available to cover the cost of higher education in the form of loans, grants and bursaries,” said minister for higher education, Bill Rammell – forgetting that most of his target audience probably thinks a bursary is a place where pre-school age kids go for their kicks.
Then something very curious happens, because the poll finds that “many parents are uncomfortable about discussing financial matters with their children” and that the solution to this is to “encourage parents and children to sit down and talk about money together”.
For people of my generation this sounds uncannily like the old attitudes to sex education in the 1960s and 1970s, something faintly embarrassing – but pretty important when you think about it – that had to be reluctantly and rather shamefacedly discussed, with everyone shifting uncomfortably in their chairs and studying the kitchen lino for all they were worth.
Indeed, my parents thought it best to present me with a pamphlet from the Catholic Society on my 13th birthday entitled ‘Boys’ Questions Answered’, which was OK but did not address the severe problems evident in the Arsenal midfield, which was one of my more pressing boy’s questions at the time.
Still, I suppose Rammell has similar pamphlets – perhaps called ‘Boys’ Questions on Generating Alpha from Open-ended Investment Companies Answered’ or somesuch – in mind, thus avoiding those toe-curling discussions about interest rates or contents insurance that would otherwise ensue.
This is the stage we have been stuck at for ever in my experience. Educating kids about the value and uses of money should be a part of every maths syllabus from the age of four onwards, and at age 11 there should be an exam in the subject. Anyone failing goes without pocket money until they pass.
For those showing real aptitude thereafter, I propose a GCSE in the subject (surely more useful than Mandarin or media studies for the majority in the UK), which would be rooted in the practical day-to-day process of using money. I foresee some objections from the store card providers, and rip-off operations in general, but I really think it could work.
Not only would this system be about money, it would be about life. And from where I’m sitting you can’t have one without the other.