Soap box: Financial savvy can and must be taught in our schools

A MONTH after Scotland was nursing its collective Hogmanay hangover, many people will now be nursing a fresh headache as their credit card bills land on the doormat.

According to statistics from insolvency trade body R3, almost four million people in the UK indebted themselves to pay for Christmas and approximately 6.5 million do not have enough money to pay for the subsequent credit card bills.

The core issue here is the awful example adults give their children when they rack up so much debt. Kids look to adults as role models in many areas. Why should their attitudes towards personal finance, debt and consumerism be any different to our own?

I believe we are storing up even more problems for the future – problems which could dwarf those of the past few turbulent years.

I am convinced that the answer lies in incorporating personal finance and simple budgeting in the school curriculum, starting in primary schools.

If we don't teach our children about basic personal finance, we will spiral downwards in a vicious circle of indebtedness, social injustice and consumer debt.

To prevent this happening, financial education – savings, mortgages, pensions, credit and debit cards, paying bills – should start early in schools.

The Financial Services Authority carried out a survey in 2006 of young people leaving school asking them whether they thought personal finance was adequately taught. Their opinion was, basically, no. Teachers said that an already overcrowded school curriculum made it difficult to accommodate personal finance education beyond rudimentary personal and social development units.

This is a big problem. Education must give our youngsters a wider awareness of the world in which we live, not just merely furnish them with adequate knowledge to get a job.

It is not enough for children to grow up and attempt to manage their money based upon what snippets, guesses or half-baked theories their parents passed on, if any.

If we depend on this method of education, lack of knowledge and ignorance will just be perpetuated down the generations.

There is also a social justice element to the provision of financial education. The impact of the recession on households has been covered extensively by the media, but we must also be aware of how it penetrates the various social demographics.

For example, if no-one in a child's family has ever had a mortgage, private pension provision or savings, what relevance do interest base rates, performance of stock exchanges or the impact of inflation on savings have on them?

But they are still important to everyone nonetheless; they are key to making sense of the world we live in and the forces that touch us all in day to day life.

We as a nation risk alienating poorer social groups from financial awareness, both at a personal and a macro-economic level. This is clearly a problem, considering that low-income households tend not to have savings and rely on extortionate credit providers to a greater extent and risk insolvency to a higher degree.

Personal finance and budgeting, along with a basic knowledge of economics, must be part of the school curriculum, and it must start in our primary schools. If there isn't space to accommodate this vital field of knowledge, space must be made.

It's all a question of priorities. The earlier we start good money habits, the stronger they'll be in adult life. Schools are keen to promote healthy eating and living through the curriculum to avoid storing up problems for the future; promoting healthy finances is just as important.

• Andrew Morrison is an audit senior at Martin Aitken & Co