Sitting in on personal finance lessons

11 May 2017

There’s nothing like a quiz to get a class of 12- and 13-year-old girls excited about banks and how they make their money. And that’s how MyBnk teacher Toby Cohen starts the financial education charity’s Money Twist lesson on ‘Your Future’ at La Retraite Roman Catholic Girls’ School in south London.

He asks: “On which day of the week are 50% of bank robberies committed?” About half of the Year 8 class put their hands up for Friday – which is correct.

Toby explains: “People think Friday is the best day because they calculate that money has been going in all week in terms of business, but actually Monday is the best day for the maximum amount of money.”

He explains that people have been drawing down on their cash all week and people also draw out money for the weekend, making Friday one of the worst days. Banks tend to restock their supplies for new business over the weekend for the start of the week.

Other questions include: “How many people called the damaged notes service last year to say ‘My dog ate my money’?”

(Answer: 4,916)

“In the USA, you can win a one way ticket to Mars. How much does it cost to apply?”

(Answer: $38)

We then move on to a discussion “Why do we use banks?” The girls came up with: to store money, to provide security, to get loans, mortgages, credit cards, payments, and insurance, to exchange money, and to make transfers.

The room then falls silent as Toby tells a personal story: “I had insurance before I was born. My mum took out insurance against me being a twin.”

He follows up with an eye-catching statistic: “In this country, you’re more likely to go to prison than to move your bank. I signed up for my bank as a student for a free popcorn maker. It probably cost the bank £10, but they’ve made much more than that back from me since.”

The girls then do an arts and craft activity in which they have to make their own bank with a name, slogan and target market. The groups produce some very creative concepts:

  • Kalm Bank – “The calmer we are, the happier you get”
  • The Platinum Club – “Only the best for your interest”
  • Meister Bank – “With big dreams come big loans”
  • Modern Uni Bank – “No limits for a better future.”

Toby asks them to invent a new kind of technology that their bank could give to its customers – face scanners are the most popular.

Then we move on to the serious business of getting to grips with Annual Percentage Rate (APR).

“Think of the ‘P’ as what you pay for borrowing,” says Toby. “You want it to be low.”

For Annual Equivalent Rate (AER), Toby says: “Think of it as ‘E’ for earn on savings. You want it to be high.”

Needs versus wants

Session 2 of MyBnk’s Money Twist series is called ‘My Choices’ and is with year 7 (ages 11 to 12) children. The tutor, Louise McNestrie, again starts with a Q&A session.

“The Harry Potter series generated how much money?”

(Answer: £10 billion)

“How much does Adele make per day?”

(Answer: $127,000)

“Gary Dahl became a millionaire in six months by selling what?”

(Answer: Pet Rocks)

The girls all think the Pet Rock concept from 1975 is stupid until Louise asks them to think about how much pocket money they have spent on Rainbow Loom Bands, the colourful plastic elastic bands that children weave into bracelets and charms. “You invested in rubber bands,” says Louise..

Then we move on to a question that really engages the room: “At what age can I start working?” Louise explains that at age 13 you can engage in ‘light work’, at age 14, you can do a wide range of jobs, working two hours on weekdays and Sunday, plus five hours on Saturdays. At age 16, you have a national insurance number and then the minimum wage kicks in at £4 an hour for 16- to 17-yearolds. One student says: “That’s not enough. I get £10-a-day pocket money!”

Louise continues: “If you’re 13 or 14, how do you get a job?” Students suggest that you could go into local shops to ask if anything is going or offer to wash neighbours’ cars. The next task is a bit tricky. Students have to define a need and a want, without mentioning the words need or want.

Louise helps them out by defining a need as “something you can’t live without” and a want as “something you would like to have, but can live without”.

The girls are then given a sheet of stickers (“Yay! Stickers!” one shouts) depicting items that they use in everyday life, such as school uniform, mobile phone, food, and new clothes. They are asked to order the items in terms of needs and wants.

Several groups put their mobile phones first on the ‘needs’ list. “I need to call my parents to tell them where I am,” says one student. Another says: “I need my phone in case someone tries to kidnap me.” Louise told me this focus on the necessity of a phone is not uncommon during these sessions because the children haven’t experienced a life without mobile phones. She says: “Are you going to say excuse me, Mr Kidnapper. Let me call my mum first?”

“What about calling 999?” asks a girl.

Louise replies: “If you’ve just been hit by a car, are you going to be able to call 999?”

She continues: “What about if the entire mobile network shuts down. There are no satellites or wi-fi. Will you still be living?” The answer is “Yes”, making a phone a ‘want’ rather than a ‘need’.

In the final activity, the children learn how to budget. They watch a video of schoolgirl Luana, who needs to save £50 in five weeks to go on a special day out with her friends. She has a weekly income of £10 from babysitting, plus a £7.50 weekly allowance from her parents. But Luana also has weekly outgoings of £5 on her phone, £4.50 on new clothes, £2.50 on food and drink at school, £3 on going out and £2.50 on toiletry products. She has to cut back on these items in order to save her £50.

The girls enjoyed this task and some managed to make drastic cuts to the outgoings. The phone, though, was mostly held to be essential!

About MyBnk

MyBnk is a charity that delivers financial education and enterprise workshops directly to seven- to 25-year-olds in schools and youth organisations. Subjects range from budgeting, banking and borrowing to student finance, tax, pensions and savings. The sessions that Moneywise editor Moira O’Neill attended were funded by the Money Advice Service’s What Works Fund, which is supporting nationwide independent evaluation of financial education interventions. Prudential Plc has also been a major backer of this type of financial education. For further information visit, email or call 020 3581 9920.

The Moneywise verdict

In both MyBnk sessions that I attended, the children were highly engaged and participated fully in the lesson. The teachers were energetic and passionate about their work. I was particularly impressed with how entertaining the sessions were, turning a subject that could be considered dry and dull into something exciting and fun.

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