Pupils learn how to be - or not to be - good at budgeting

20 June 2019
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A class of year-nine pupils at St James’ Catholic High School in Colindale, north London, were recently shown that saving for a rainy day doesn’t have to be boring as part of an innovative personal finance workshop by the Shakespeare Schools Foundation as part of My Money Week (10 to 16 June).

Usually charged with bringing William Shakespeare’s works to life for schoolchildren, the charity’s trainers were challenged to bring the same energy to personal finance education by asset manager BMO.

The session centred on a game where teams were given £20,000 to spend over a year. With this money, they were allowed to splurge on luxury items, from iPhones to designer trainers. A throw of a dice decided whether certain life events, from home repairs to weddings and last-minute holiday plans, would throw their budgets awry. One team learnt the hard way that if you spend all your money as soon as you get it, you’ll end up in hot water when unexpected expenses come along.

The teams were also encouraged to save money and had to decide between the low, but guaranteed, returns of a cash account and the potentially higher returns of a stock market investment.

Those who put money in cash got a (relatively speaking) attractive 2%, but those who plumped to put some or all their spare readies in the stock market got to spin a wheel to determine their returns. Some came out with big gains, while others learnt that the value of their savings may fall and recognised that the best approach is often to spread their money to boost their overall returns.

At the start of the session the group had talked about the best places to keep their money, with many favouring keeping it at home for ready access. However, by the end of the session they had learnt that by failing to save their money in a designated savings account that pays interest, they were effectively turning down free money.

Jenny Whelan, school chaplain and runner-up in last year’s Moneywise Personal Finance Teacher of the Year Awards, says that they had a brilliant afternoon.

“Students were introduced to both Cash and Stocks and Shares Isas as a tax-efficient way of saving, and the associated risks with investing in the stock market,” she explains.

“Students also looked at the consequences of buying large purchases, thus having no back-up savings. The Shakespeare Schools Foundation simulated possible expenditure such as a car breaking down and the problems associated with not having money stored away for a rainy day.

“This was a real eye-opener for some students, as many spend everything that they earn each week.”

The session was a hit with the students too, some of whom had never heard of Isas.

Janina, one of the students who took part in the workshop, says:

“I thought they made it really good fun, helping us learn more about money saving. I also learnt that there were other accounts that I haven’t even heard about. It made me want to find out more.”

My Money Week is an initiative by financial education charity Young Enterprise to encourage primary and secondary schools to teach children about personal finance. It provides them with the necessary resources, including videos and ready-to-teach lesson plans.

This year, primary school pupils focused on attitudes to spending and saving, while secondary school students were encouraged to think about borrowing, peer pressure and getting value for money.

Research from BMO suggests that among 16- to 21-year-olds, nine out of 10 want more help with their personal finances. What is more, over a third say they would be encouraged to save money if they could be taught how to do so at school.

Half wanted help knowing where to invest money, while 47% wanted to learn about different saving methods. Just under 40% wanted to know more about buying and selling property; 34% said they needed help understanding financial jargon; and 22% wanted to know how to get out of debt.

This was certainly the view of Kofi, another of the students at the school. He thinks that it is really important that teenagers learn about personal finance.

“We are going to be adults soon and we need to know how to manage our money,” 

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