Top Tips to Support Young People Learning Financial LiteracyMarch 3, 2021
When we talk about financial education, or as it is sometimes called ‘financial literacy’, it is surprising to hear that children as young as five start building attitudes and habits around money. And yet in the UK, only 48% of children and young people currently receive a meaningful financial education. That means more than half of the UK’s youth population is missing out on crucial financial life skills that they need for the future.
Coupled with the significant impact of COVID-19 on young people’s education and employment opportunities, it’s clear that we must support our teens wherever we can.
At MyPocketSkill, our vision is to create a financially empowered Gen Z. We do this by working closely with young people and connecting them with skills-building and money-earning opportunities. We help young people learn about money and are experts in what works in the field of financial capability. Having worked extensively with the Money Advice Service and the Money and Pensions Service to research the most effective ways to instill good financial habits in young people, here are some of the key tips we want to share:
- Learning (and Earning!) By Doing
Research shows young people can develop key skills like self-reliance and financial responsibility through earning their own money. Whether this is by doing chores for pocket money or giving online homework help via the MyPocketSkill platform, learning and earning by doing means teens are more likely to retain information, understand the value of money and develop skills that prepare them for working life.
- Set a Savings Goal
Encourage young people to set a savings goal. Getting them to think about the future and what they may need to save for is a good way to introduce learning about money from a young age. Saving towards an identified goal not only encourages effective financial planning but will mean they are much less likely to overspend. Whether they are saving for a new phone, a guitar or university fees, setting medium and long term savings goals can help guide positive financial decisions.
- The 50/30/20 Rule
Explain the 50/30/20 rule. This is a simple way to keep track of spending as a young person and an excellent habit for the future. Identify your needs - 50% of your money should be spent on these. Identify your wants - 30% can be spent on these. The remaining 20% should be saved towards your savings goal or emergency fund.
These simple tips can instill long-lasting positive financial habits in young people and are even more crucial at a time when COVID-19 has meant job losses are hitting young people hardest. Research recently found that 49% of 16 to 24-year olds are feeling more anxious about money than they were six months ago and that one in five (20%) of those aged between 16 and 24 are struggling to pay their bills.
How can MyPocketSkill help? We work hard to provide solutions for young people by offering earning opportunities combined with simple financial education at teachable moments. Megan, 18, from Kent says: “MyPocketSkill has offered me structure and a way to earn money and get experience in tutoring at a time when it seemed impossible for me to get a part time job”. Our work also has a double impact - matching young people who are eager for paid experience with parents who are faced with the challenges of juggling working from home and home-schooling their kids. Roy, a parent says: “MyPocketSkill has proven to be a lifesaver while in lockdown. I was able to find fun activities for my nine year old, which keep her busy for hours every week.”
You can learn more about how to teach young people about money here.