Why financial education should be compulsory for all students?
Anne-Lise Cuypers, Pedagogical Advisor for Catholic Schools in Limbourg and Antwerp/ Teacher Training Expert
Financial education is becoming increasingly important in our society, and not just for companies and investors - it is becoming essential for the average consumer trying to decide how to balance his budget and ensure an income when he retires.
Of course people have always been responsible for managing their own finances – but recent developments have made financial education and awareness increasingly important for their financial well-being. Today consumers are not just choosing between interest rates on two different savings plans, but are rather being offered a variety of complex financial instruments, with a large range of options. At the same time, the responsibility and risk for financial decisions that will have a major impact on an individual’s future life.
But how can individuals be expected to weigh the risks and make responsible choices in an ever more sophisticated financial market if they are not financially literate.
Financial literacy is defined by OECD as the set of necessary skills and knowledge that allows an individual to make informed and effective decisions with all of their financial resources. The information available on consumer financial literacy is worrying for two reasons – not only do individuals generally lack an adequate financial background or understanding to navigate today’s complex market, but unfortunately they also generally believe that they are far more financially literate than is really the case.
Recent evidence from the OECD PISA questionnaire suggests that, although the overall level of financial literacy is quite high in Flanders, there is still considerable variation in the level of financial literacy over students and between schools. These observations can be traced to the fact that there exist no fine-tuned financial literacy strategy that is implemented in a consistent way in the Flemish secondary schools: not all schools offer financial education and those that do often do so in a fragmented and ad hoc way.
Ilse Cornelis (Center for Budgetcouncelling and Research, Thomas More College ) conducted research on financial behavior by almost 2,500 students from third grade of secondary education. The results were quite worrying: 12% of young people presented risky financial behavior: they borrow and spend too much money shopping online (or have a tendency to buy compulsively), more than 25% engage in monetary bets with friends and 10% have already debts. Therefore, it is crucial that financial education becomes compulsory for all young people at this stage in their development.
At the end of May , the Flemish Government adopted a broad package of measures within the framework of the Flemish education reform. Financial literacy is one of the key competences of the basic literacy of the first degree of secondary education. For these and other key competencies The Flemish Parliament will indicate the goals to be achieved by each student. This is already a very important step to make young people financially literate.
Do you agree with me? Share your view!Category : fiancial literacy Posted : 23 July 2016 12:23 UTC