Financial Education for Children
By Family Investments - 25th August 2010

Children will receive lessons on managing their finances from the earliest years of their schooling. Lessons in personal finance will be compulsory from 2011.

The classes will fit in with the personal, social, health and economic (PSHE) curriculum, which has been created to promote the economic and financial well-being of young people throughout their lives.

Five year olds will be taught how to identify different banknotes, and from ages seven to 11, children could learn about managing bank and savings accounts and budgeting. From 11 to 14, children could be educated about credit cards, mortgages and loans, and managing household finances.

And as students start their GCSE years, they could receive education in how to budget effectively and avoid unnecessary, expensive and unsustainable levels of debt.

A study by the Personal Finance Education Group, an educational charity that works with schools, showed that over 50 per cent of teenagers would like more information and training on how to control their savings.

The scheme will help benefit the generation of children who were eligible for the Child Trust Fund, the long-term savings and investment account available for children born between 1 September 2002 and 31 December 2010. In addition to giving children a financial asset for the start of their adult life, the CTF was also intended to help build a habit of saving and financial discipline that would last the child throughout their lifetime.

But while financial education may be appearing in schools, parents who understand the benefits of teaching their children about money have plenty of other options. Many local councils, including Gateshead and Devon, operate schemes that show youngsters there's more to life than the bank of mum and dad. Some banks and building societies also provide workshops for youngsters.

There are also independent resources for parents. The BBC has an online section, showing parents how to explain money to children, both in terms of family finances and the products available.

Teaching Ideas is a website for teachers, but anyone can make use of it. It has a number of really good games and tasks that children can complete, all of which are designed to add to their understanding of how money works.

Parents looking for more information on family finances may find the working tax credit calculator useful as a guide to Government benefit entitlement. Then there's The Investing Site, which provides a step-by-step guide to children and their money. It's also pretty good at helping parents learn about finance - just in time to answer all those tricky questions!