Teenagers lacking financial education

A recent survey of British teenagers relating to credit cards has highlighted the need for financial eduction to be part of school education. The survey conducted by the national money charity, Personal Finance Education Group found that one in twenty thinks banks will voluntarily waive credit card debt.

25% of those surveyed felt that credit cards are "just something that allows people to buy goods and services", revealing a major lack of understanding of the nature of credit card debt.

Concerned PFEG chief executive Wendy van den Hende, said: "We owe it to our young people to ensure that they have the financial acumen to deal with the responsibilities of being an adult".

The survey highlights an increasingly debated issue. As well as learning core subjects such as maths, science and languages, should schools be teaching real life skills such as financial management and planning? Consumer debt in most western countries including the UK, USA and Australia continues to rise with many getting large amounts of debt at a young age.

It’s not all bad news though, it seems some good lessons on financial planning are getting through with 52% saying they would save half and spend half of any windfall they received.

Overall, 66 per cent of teenagers said they thought about money every day, which Ms van den Hende felt demonstrated they were "relatively clued up on the mechanics of spending and saving money".

The UK Financial Services Authority (FSA) did release a research paper on financial eduction in schools in June 2006 and has put forward suggestions that the subject is included as part of the UK curriculum.

One alternative to credit cards suggested for those turning 18 is the new breed of debit cards backed by the credit card providers such as Visa. They offer the same international acceptance as credit cards and can be used for internet and phone shopping but draw money directly from the customers bank account ensuring a big debt is not built up.

PFEG is an educational charity that aims to impart knowledge of financial matters to young people by working with schoolteachers and young people aged four to 19.