For World Youth Skills Day, Carly Stone explores why financial educations skills are important for young people and how to improve the financial wellbeing of the next generation.
Financial wellbeing is about having a good relationship with your money and that starts by building a set of skills when we’re young.
Our 2021/22 Young Persons Money Index found that:
- 72% of 15–18 year olds want to learn more about money and finance at school
- 15% cited school as their main source of financial education
- 68% of 17–18 year olds said that most of their financial understanding and knowledge comes from their parents.
A robust framework for financial education in the UK is long overdue. With levelling up being a long-term commitment, consistency in teaching these skills is required now more than ever.
We’ll continue to campaign for financial education to get the curriculum space it deserves. In the meantime, how can we give young people the skills they need to manage their own finances?
Budget and plan
It’s helpful to keep an eye on where your money goes. You can achieve this by creating a budget planner and then cross-referencing it with a personal spending plan.
Whilst a planner sets out what you want to spend, a spending plan tracks the money actually leaving your account.
It can be a useful wake-up call to realise how much we spend on unnecessary expenses. Small changes are completely in your control and can have as big an impact on your financial situation as getting a pay-rise.
Pay with cash not credit
Not actual cash of course – that would be crazy! Instead, get in the habit of using debit cards over credit cards.
A key rule of any personal financial adviser is to never let your expenses outstrip your income. This can be difficult to maintain if you use credit cards.
Exercise self-control by saving up for everyday purchases. The sooner you appreciate the essential life skill of delayed gratification, the sooner your personal finances will be in order.
Build your savings
It’s good to get children and young people into the habit of saving. Open a savings account for them from a young age and encourage them to add to it regularly so that saving becomes habit forming.
That way they will treat savings as a required monthly expense.
The Princes Trust offer two versions of a savings calculator to help you understand how long you need to save up a specific amount or how much you need to reach a particular goal.
Find out more about our Young Persons’ Money Index
Find out more about our financial education qualifications