Financial Education Is Vital — But Not for the Reason You Think

Financial Education Is Vital — But Not for the Reason You Think

by Michael Mercieca, CEO, Young Enterprise (JA in the UK)

Originally published at on June 25, 2015.

When it comes to the debate on financial and enterprise education in UK schools, there’s a powerful standard argument: children need to learn how to manage, spend and save their money; they also need to learn to be employable; these things enable adults to be productive members of society and control their own future. And that’s good for the UK economy. But the other day I came across another very compelling — and very worrying — argument.

Earlier this year, noted economist Professor Noreena Hertz from University College London conducted a survey on the attitudes of British and American girls aged between 13 and 20 years old. The findings are startling and led Hertz to coin the term ‘Generation K’, after Katniss Everdeen, the heroine of the Hunger Games films.

Writing in the Financial Times, Hertz says: “Many of those in their twenties and thirties — the ‘Yes we can’ generation — grew up believing the world was their oyster. But for Generation K the world is less oyster and more Hobbesian nightmare. […] They are a group for whom there are disturbing echoes of the dystopian landscape Katniss encounters in The Hunger Games’s District 12. Unequal, violent, hard.”

Technology has shaped this new Generation K. Born after the advent of the internet, they can access all the information they need, can communicate with friends and family instantly and think globally rather than locally. But they’ve also been shaped by incredibly negative forces: the economic crisis, the great recession, the almost constant threat of terrorism and savage global conflicts. Add to this the constant talk of university debt, cuts and austerity, and the less positive aspects of modern technology: the peer pressure of social media, the shock-horror online news media, and the ability to spend money online at the tap of a button in an almost cashless-world.

Contrast this with the childhood of the previous, the 20-something and 30-something girl-power generation. For the older ones, there was no home computer and for the younger ones it was still an expensive luxury few could afford. For both, the internet was complex and relatively small in scale. There was no Facebook. Buying things online was dangerous and for parents only. These children grew up playing outdoors and their prized possession was a Sony Walkman. They grew up at a time when the British and global economy was fairly stable and, during their formative early years, you can imagine them believing all was relatively right with the world.

What now? According to Hertz, today, 75% of teenage girls are worried about terrorism; 66 per cent worry about climate change; 50% worry about Iran. She continues: “They also worry inordinately about their own futures. 86% are worried about getting a job; 77% about getting into debt.” And there’s the rub. If we trust the survey results, almost all Generation K young people are hugely anxious and worried about getting a job and getting into debt.

I was shocked by the results of this survey. It’s so easy to forget how worrying the future must be for young people today. I, for one, do not want our young people to be this worried about getting a job and getting into debt. Not when it’s in our power to teach them how to manage their money and see life as a series of exciting career choices and business opportunities.

At Young Enterprise, which now incorporates the Personal Finance Education Group (pfeg) we believe you need to start early. And we’re not alone: according to research by the Money Advice Service in 2013, authored by behaviour experts at Cambridge University, financial habits are formed by the age of seven. We also believe you need to make it fun. A great example of this is our Fiver Challenge (supported by Virgin Money), aimed at primary schools. Participants are challenged to set up mini-businesses to create products or services they can then sell or deliver at a profit, and engage with their local community. The Fiver Challenge introduces young people to the world of enterprise and helps build important employability skills, such as risk-taking, teamworking, problem solving, communication and financial literacy, which they can continue to develop in later life.

Through our Women in Business programme, we work in partnership with The Government Equalities Office and GE Capital to provide unparalleled opportunities for female undergraduates to engage with inspiring mentors in the creative industries and the visitor economy. And we’ve also just held our seventh annual My Money Week, a national activity week for primary and secondary schools. With free teaching resources, ideas and competitions (which we have re-introduced with help from Visa Europe), it gives children and young people an opportunity to gain the skills and knowledge they need to look forward to their financial future with confidence.

I’m confident that at Young Enterprise we are working as hard as we can to equip this generation of children, and the next, with the financial and employability skills they need. I hope what we’re doing alleviates some of their worries and gives them back a feeling of control over their future. But, of course, we can’t do it alone. Our children and schools need the full support of both government and business to develop a long-term strategy to embed financial education into every aspect of the curriculum, right from our four-year-olds in reception up to graduation at higher/further education.

If we could turn the page, start afresh and work together; commit ourselves to financial and enterprise education across the curriculum at all stages and do whatever it takes to really engage young people, perhaps will we see a new generation free from this crippling fear of debt and unemployment. Surely we have to try?