Financial literacy

1/ While buying tomatoes at a market, you are given two options: you can either buy loose tomatoes for £2.75 per kilogram, or a 10kg box for £22. Why is the second option better value for money?

2/ Why might it be more sensible to choose the first anyway?

In 2015, teenagers from 15 countries around the world were asked these two questions as part of an OECD financial literacy test. It found that one in five 15-year-olds had only the most basic financial literacy skills, meaning they struggled to answer the questions above. (1/ A 10kg box is £2.20 per kilogram. 2/ You have to be sure you will eat 10kg of tomatoes before they rot!)

This matters, as financial literacy is a crucial life skill.

In 2018, people in the UK owed £1.58 trillion in personal debt. For many, this is a normal part of life — a natural side effect of buying a house or going to university. They know they can pay the money back.

But falling too far into debt can have devastating consequences. Not only does it become difficult to pay for things like food, but it can also lead to family breakdown, homelessness, as well as mental and physical health problems. Learning to manage money is the best defence against this.

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Assembly

Part of financial literacy involves understanding how economic information is presented. This video teaches students how to spot misleading graphs.

Activities

  1. Watch this 10-minute introduction to money and finance. Then write your own simple definitions for the following words: money, debt, lenders, borrowers, capital, bonds and stocks.
  2. Create a poster which gives financial advice to young people in your school.
  3. Imagine you earn £250 per week. (This is close to the minimum wage for 18 to 20-year-olds, assuming they work for eight hours a day, five days a week.) Create a budget which includes how much you have to spend on food, bills, housing, transport and luxury items. If you’re unsure, research how much things cost in your local area. Do you have anything left over to put into savings?