Lessons in managing money
3 MIN READ
Many young people struggle to understand how to manage money.
A worldwide 2017 OECD study* found that 1 in 4 students were unable to make simple decisions on everyday spending.
They struggled to understand things like the interest rates on a loan or a mobile phone payment plan.
Only 1 in 10 were able to understand more complex issues such as tax.
The study concluded that students often lack the education, training and tools to make informed decisions about their finances.
Why money skills matter
Understanding how to manage money starting in childhood matters because less literate children may make poorer decisions about saving, borrowing and investing when they grow up.
So what’s the best way to help young people learn about money?
Financial education for life
It’s never too early to start teaching children how to manage money well.
Parents obviously have a big role to play. They can help by giving young people practical experience of making financial decisions.
The UK’s Money Advice Service suggest activities like involving kids* when paying for things in shops, helping them work out how long it will take to save to buy something they want and encouraging them to work out a budget for an event like a family day out.
Financial education at school can also support young people to develop good money management skills early in life.
Bank of Ireland Schools’ Programme
Bank of Ireland offers a free Schools’ Programme to all primary and secondary schools in Ireland to help students develop their financial literacy.
For primary schools, the programme includes ‘Talking Cents with Ollie’ the money magazine for 7-12 year old children written by Frank Conway and features a Financial Literacy workshop.
For secondary schools, the Money Smarts programme offers Business Start-Up Academy which introduces students to starting their own business, a Financial Literacy workshop and a school bank which pupils run themselves with on-site help and guidance from Bank of Ireland staff.
“The programme has been invaluable in helping our students get real life experience about money,’ says Ruth Kennedy, TY Coordinator, Loreto Secondary School, Wexford.
The value of working for a school bank
Secondary school students who want to help run their on-site school bank have to first apply for one of the 5 roles – from bank manager to digital manager – and are then interviewed by Bank of Ireland staff.
For many pupils, this is their first job application and it gives them valuable experience of the world of work which they can add to their CV.
‘They were all really nervous at first but they got through the interviews and really enjoyed it,’ says Anne Cleere, TY Coordinator, St. Mary’s CBS, Enniscorthy.
The students then have to work as a team to open and run the bank professionally, always supported at their school by our Youth Coordinator who answers any questions they have.
This experience of teamwork and serving their fellow students can also be a very positive experience.
Not sure what to do with earnings
In the OECD survey mentioned above, 64% of students earned money from ‘working outside school hours or doing occasional informal jobs’.
Children do seem to have more money than we had when growing up but how best to manage the money they have is still a challenge.
It is important to stress that the bank accounts that pupils open at school – they can open both current and savings accounts – are fully-operational 2nd level student bank accounts.
Students can use their account to help save their pocket money or income from part-time jobs and to develop a responsible attitude to money.
Learning how bank accounts work
Although it may seem obvious to most adults how bank accounts work, young people still have plenty of questions.
Practical experience of operating an account can help them understand this life skill better.
While setting a saving goal and regularly setting money aside each week towards it is a fundamental money management skill.
The bank accounts also come with a Visa debit card if you are 14 or over which can help pupils manage their money when they go on school trips**.
‘We went to Cologne earlier this year,’ says Anne Cleere, ‘and because they had their bank accounts set up students could use their debit cards in Germany which meant they didn’t have to carry cash around.’
How to set up a school bank
To register your primary or secondary school to take part in the Bank of Ireland Schools’ Programme, click here.
*Clicking on this link brings you to a third-party website. Bank of Ireland is not responsible for content on this website.
**There may be fees and charges for using your Visa debit card abroad.