“You can’t spend what you haven’t got – simples!”. That was one response on Facebook to my reminder that www.financialeducationpetition.com ends on Wed. For me the statement, while well meant, is simply wrong, and this type of misinformation is one reason why we desperately need financial education in schools.
Now before getting into it I should say 99% of people’s response to my Facebook page note on this was ‘signed it’ – and we’ve seen over 4,000 people sign over the weekend. I always say we’re a nation educated into debt, but never about debt, so if you haven’t added your name to tell the PM to sort this, please do, it only takes 20 seconds.
Why you can and most must spend what they haven’t got.
My answer on Facebook was:
“One of my lessons in www.moneysavingexpert.com/teencashclass is if you don’t spend what you havent got you CAN’T go to university and you CAN’T buy a house. Not so simples ;)”
Debt is part of the modern world. It’s disgusting that we’ve had student loans for 20 years yet as a society never taught our youth about it.
What we need do is teach people how and when it’s right and wrong to borrow, what is good debt, what is bad, and how to ensure it’s planned, budgeted for and affordable.
One reason I think we need this in schools is while parents also have a responsibility to educate their children about finance, many don’t, and those that do get it badly wrong – misunderstanding how our hugely competitive modern consumer economy works. We’re a hideously indebted nation, both individually and collectively, and we need to break that cycle (for all the arguments in full see my past financial education blog).
This is why in my teen cash class I semi-tongue in cheek warn about listening to grandparents’ debt advice. I worry that those who caution “never a borrower or a lender be” risk damaging kids’ financial futures. Too often I hear of kids going to uni, trying not to take out any debt, including avoiding the ‘good debt’ of student loans, finding it impossible and as they’ve never been taught to delineate, end up both with student loans and the ‘bad debt’ of credit cards.
So I think a mix of parental information and good values along with hard facts and decent practical understanding of the system is important.
How many people now wish they’d had it?
Reading through peoples’ reactions throughout this campaign has only cemented my view, here’s just a couple of comments from the most recent Facebook discussion on it:
“I left home with no idea how to pay a bill, got credit cards thrown at me, signed up with no idea what APR was never mind checking what it was. Years later stuck with debt, having finally learned what I could have been taught in school and saved all the fuss!”
“If my kids could learn how to handle money better than I do, it would be brilliant. I am so grateful for all your advice but do wish I had learnt money management when I was younger as it would have saved sooo much hassle! I was happy to help by signing the petition”
“Nice one Martin I’ve thought this ever since I left school and ran up a huge Access card debt .. oh those were the days, a VCR that took five years to pay for lol”
“l really hope you successful with this – l have three young adults who all fell into the trap of credit cards and store accounts – so please let us teach our children, they are the future of this country”