Did you ever question the purpose of learning (seemingly) complex algebraic formulae at GCSE? When Maths gets hard, it's easy to question the relevance of what we are being taught and, above all, the significance it plays in our everyday lives. This sentiment is given credence because, even now, very little has been done to connect the dots between Maths in the classroom and Maths in real life. As we grow older, however, the importance of basic mathematic and - more precisely - economic aptitude becomes apparent almost overnight and, with hindsight, can seem overwhelmingly neglected in our earlier years. You may have found yourself a blissfully ignorant school pupil one day, a university-goer with a 3% interest on your student loan and the necessity for budgeting and financial planning the next. It has been left to parents to instil financial responsibility in young adults and yet many parents have less knowledge on the subject than required or else do not spend enough time discussing it. The most pertinent question becomes: why haven't we been taught basic personal finance, such a fundamental aspect of adult life?
There have been a few arguments against institutionalised teaching of financial literacy, with some stating that there aren't enough teachers (like parents) who themselves understand the subject. Others state that it should be deemed a subjective topic with consequently risky implications for teaching at school. These points, however, are not deal-breakers, they are manageable - especially if the Government were to push forward with making it part of the National Curriculum. In America, the Council for Economic Education recently launched Math in the Real World, a program that seeks to integrate maths with economics and personal finance through basic lessons aimed at secondary school children. The lessons cover skills such as annual percentage rate (APR) and interest that pertain to real-life situations through more academic (and probably familiar) mathematical concepts, such as graphing and formulas. Math in the Real World is a software tool that guides teachers in the subject, providing the lessons for adaptation and enabling them to keep track on student progress. As such, it is an excellent initiative and the UK would benefit from looking to it as a model for how to implement financial responsibility through academia.
To develop the idea further, here is a list of several basic topics that could and should be addressed in financial literacy aimed at school children:
- Credit Scores (and how they are calculated)
- Profit (Net, Gross and Maximisation)
- Cash Flow
- Compounding Interest
- Banking Products (and, like your mobile network service provider, how to get the best deal or when to switch bank)
- The Psychology of Money (Budgeting, Savings and Personal Financial Planning)
If initiatives were taken to ensure that young adults leave school equipped with information on the above, it is highly likely that a larger percentage of our growing, economically active population would remain out of debt and making their money account both for more and for longer.