To better understand financial products and not get “taken” by banks and financial advisers many people feel it is best to include personal finance education to school curriculums. However, for a few reasons, it looks as though it will not be mandatory.
Financial Services Authority says that today the majority of consumers do not know basic financial definitions. Compound interest is unknown to most, making it difficult to determine if a loan rate or credit card rate is good or not. They do not know that their banks rates are no longer competitive. Risk and reward investment are unknown and are shocked when their fund labeled cautious, drops more than 40% in value.
Last night in London at dinner with Pensions Minister Steve Webb, we asked if he felt it was advisable to include personal finance lessons in school as a subject. Mr. Webb says that there are many new subjects to consider with personal finance being just one.
Training new teachers would be difficult and since current teachers may not know enough about the subject.
Even though personal finance is one of many, it should be important since consumer lack of knowledge has help create the huge debt the country has now.