It is a truth almost universally acknowledged that children get most of their financial education from their parents. A recent survey by the Centre for the Study of Financial Innovation found that almost 50% of young people opened their first bank account at the same bank as their parents, and many never leave – it is also pretty well known that Brits are more likely to get divorced than to change their bank accounts. So, if young people look to their parents for financial advice, it is vital that their parents have the most update knowledge available, and the best resources with which to engage their children. Vivi Friedgut’s new book does this on both counts.
It is split into 52 short chapters (one for every week of the year), with exercises and a CD with lots of fun games and activities to go with it. Each chapter looks at a distinct area, such as tax, budgeting, overdrafts, and even drugs and alcohol – making it not just a guide to money, but also an acceptance of the overarching part played by money in also every life situation. This approach is particularly pertinent given the Government’s decision to include financial education in the National Curriculum under the banners of PSHE and maths.
However, apart from a brief introduction to the basic maths needed to navigate your way round the world of money, it goes above and beyond the constraints of the classroom. An experienced financier herself, Friedgut recognises the value of learning about money management by actually making decisions about money. Hence, instead of simply teaching her readers about how to calculate APR, or advising them to avoid certain types of debt, the exercises at the end of every chapter actually take the whole family out of the house, and into the type of everyday situations where they are likely to have to make decisions about finance. One week, for instance, she sends everyone down to the supermarket, where children are taught how to save money by buying in bulk, or choosing less expensive brands to help their money go further. Another week, they are asked to scour the newspapers for different adverts offering credit and loans, in order to understand how interest rates work.
After all, personal finance doesn’t need to be complicated. The best way to help young people towards financial independence is to encourage them to take decisions as soon as possible. The more in control they are over their money, the more likely they are to continue to make sensible financial decisions as adults, and in all areas of their lives. By keeping things as simple as possible, they are more likely to want to carry on learning about effective money management.
Money Smarter: A Family Guide is available from http://www.blackbullion.co.uk/shop , costing £8.99