Teaching Students Financial Skills for Life

Teaching students financial skills for life Robyn Scott Education Manager, Commission for Financial Literacy and Retirement Income Children growing up in the 21st century face financial and skills to take charge of their own lives. Giving them real issues that previous generations didn’t have to worry about. examples at school will help them make more informed decisions When our parents and grandparents were at school, we lived in the future. in a mostly cash society – credit cards and loans simply weren’t The positive benefits of financial literacy stretch beyond available. Now we live in a world where plastic rules, students the classroom. There are spin-offs for families and the wider are likely to graduate with a qualification plus associated debt, community. I know of many examples where students have gone and school children want the latest mobile phone. home and spoken to their parents about money and the pitfalls of This means our children face debt for the first time after the financial decisions at a much Talking about money shouldn’t discussion was started in class. earlier age such as sign­ing up to Talking about money shouldn’t a mobile phone con­tract, under­­ be an adult’s only topic and it is be an adult’s only topic and it is standing tax and KiwiSaver irresponsible to send kids out into the irresponsible to send kids out if they have an after school into the real world without the job, and overdrafts and loans real world without the skills they need skills they need to make the when they start university. If right choices. they don’t have the appropriate to make the right choices. In November last year, the money skills they are susceptible to making poor decisions and Ministry of Education released its first financial literacy can end up in worrying financial situations. resource for social sciences. As part of the Building Conceptual In 2004, the Commission for Financial Literacy and Retirement Understandings in the Social Sciences (BCUSS) series, Taking Income began working with the Ministry of Education to develop Part in Economic Communities provides teachers with methods a framework to help teach students about managing everyday to develop their students’ financial literacy within the context of money. social sciences and addresses the fact that children begin making The goal was to integrate financial literacy into the curriculum financial decisions as soon as they have access to money. and prepare young Kiwis for the real world. One survey at the This resource will give your teachers the foundation they time, showed students felt that having a credit card was a rite of need to feel confident to incorporate financial literacy into their passage, but only a small percentage understood the necessity curriculums. of paying it off in full each month. In the last 10 years the financial literacy movement in New This work with the Ministry culminated in a pilot to test the Zealand has come along way. More and more curriculums across framework in 2009. However, the hard work wasn’t over and in the country include financial literacy and new and innovative some respects the initial resources produced were just the start ways to teach financial literacy in schools are beginning to be as the Commission looked for ways to encourage and empower adopted such as the Smart Money Competition being run by the schools to teach financial literacy. Commission and BNZ. It’s an interesting new take on teaching Over the last three years, the Commission has heard feedback financial literacy in schools, and one that puts the children in from teachers about the great work that’s happening in schools charge as Years 7 and 8 students are asked to make a short movie around the country. One of the most rewarding aspects of about being smart with money. The competition is being held teaching financial literacy in schools is seeing how engaged for the first time this year and I encourage you to have a look at children are when learning about money. the website and get your school involved. It’s all about making it real. Students at one boys’ high school Your teachers are better equipped than ever before to ensure are given the scenario of buying their first car. They need to the best outcomes for your students and lead them towards a work out a budget and investigate what they can afford. It really financial future that is secure and rewarding. With the help of hits home when they realise it isn’t just the car they’re buying – resources like BCUSS, and the Smart Money Competition more insurance, petrol, registration are all costs they didn’t consider. Kiwi kids can walk out of the school gates with life skills that will Teenage boys don’t want to be told that flash cars are out of their benefit them and their families. league, but this exercise really gets the message across and teaches The ‘Taking Part in Economic Communities’ teaching resource them to think about the hidden costs of purchases and how to was published online in October and distributed to schools budget for ongoing expenses. in November. For more information on the Smart Money Financial literacy equips young people with the knowledge Competition go to www.smartmoney.org.nz.