THE IMPORTANCE OF FINANCIAL CAPABILITY
'Financial Capability means being able to manage money, keep track of your finances, plan ahead, choose financial products and stay informed about financial matters.' (Financial Services Authority)
Personal finance has become increasingly complex over recent years, and a solid grasp of money matters is now essential to the wellbeing of individuals, families and communities.
Research1 has revealed that over half of England's teenagers have been or are in debt by the time they are 17, and two-thirds think about money every day. In addition, 90% worry about their money and spending but tend to think of overdrafts and credit cards as easy ways to spend more than they earn, or to buy things they couldn't normally afford.
Personal finance education can help young people cope with the increasingly complex financial environment they experience as they get older. To make sense of the options open to them in adult life, all young people need to learn how to manage money and plan for the future.
Teachers are well placed to help students understand about making long-term financial plans, saving for the future, and pensions. It is recommended that teachers introduce their students to these concepts when/before using this resource, to encourage them to think beyond the immediate future.
The curriculum
In England, economic wellbeing is one of the five strands of the Every Child Matters agenda. In the secondary curriculum, there is now a programme of study for economic wellbeing and financial capability in key stages 3 and 4 as part of personal, social, health and economic (PSHE) education. This recognises the importance of financial capability as part of the basic education of all young people. Education for financial capability aims to provide them with the most practical of life skills. It focuses on the real issues that affect all of us and should, therefore, be a key part of the curriculum for all students.
In Scotland, Learning and Teaching Scotland (LTS) supports the view that financial education makes a valuable contribution to Curriculum for Excellence and its four capacities: Successful Learners; Confident Individuals; Responsible Citizens; Effective Contributors. LTS also agrees that all young people should have opportunities to acquire broadly based financial capability, defined in terms of understanding, competence, responsibility and enterprise.
Read more about curriculum relevance.
1Online research conducted by EdComs, February 2007