Tuesday, December 24, 2013

Financial literacy in school is common sense

On my plane to London and then Milan, Italy , a few days ago, I picked up the Financial Times, a newspaper I particularly like, but that I normally read online. The week-end edition had a FT Money section, which was reviewing the main events of 2013. As I was browsing through the articles, I noticed one that was titled: “Cheer up, 2013 wasn’t as bad as we thought” by Jonathan Eley. It was about the UK and the author listed five reasons why 2013 was actually much better than it looked. I reported below his number 4 reason in quotation marks:
“Children will be taught about money. What was the best thing the government did this year? For me, it wasn’t putting Aim shares into Isas; it was putting financial education into the national curriculum. This passed barely noticed, won’t come into effect until next year, and will take many years to bear fruit. But it’s vital. We cannot expect young people to take responsibility for their own financial future unless we give them the skills and knowledge to do so.” 

 I report the link to the article at the end of this post, if you want to read the other four reasons why 2013 was not as bad.

I was pleasantly surprised to read this article, but it also made me realize that adding financial literacy in school has become common sense. Anyone who understands the changes in the current financial environment can see that the new generations will need new skills and these skills are best acquired in school. It is a simple argument and I hope not just the UK but other countries as well will think of adding financial literacy in school in the new year.

As I landed in Milan, I was determined to do some qualitative testing on my favorite subject: my little niece Giorgia. So after the many hugs and kisses I get when I come back to Italy and while I was looking at the new drawings she did for me, I asked her whether she was interested in learning about money. I was not even done asking the question that she jumped from the chair and she went to get her piggy bank. I was amazed by how much money she had in there. It was obvious that we had to go beyond the lesson on money, we had to talk about investment. So I told her that she should not leave the money in a piggy bank, she had to put the money at work. And while I was thinking of creative ways of explain that to her, she told me the she and her schoolmate Michelle were thinking if Santa Klaus needed help with his toy factory, an idea suggested by one of the parents.

 The morale of this story can be summarized as follows:
1)      It is never too early to talk about money to children;
2)      It is best if money is learned at school, so we do not have to spend our time thinking of ways to teach money ourselves (I do it for living, but in my case as well I would prefer to play checkers with Giorgia);
3)      It Santa Klaus were to do an IPO, we will be ready to invest. For the moment, indexed funds will have to do;
4)      The new year will not be as bad if we have financial literacy in school. 

Here is the article. The online version was titled: Five reasons why 2013 was better than it seemed
http://www.ft.com/intl/cms/s/0/ef24e98c-67c9-11e3-8ada-00144feabdc0.html#axzz2oDtaYRZc

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Wealth Community said...

What a great article and yes it does seem like common sense! Never ever too early to empower children to make educated financial decisions, we couldn't agree more!