18/06/2018 10:24 BST | Updated 18/06/2018 10:24 BST

Should Children Sit A Financial Literacy Exam?

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Dreaded by many and loved by few, exam season is upon us. In schools up and down the country teenagers will be frantically scribbling, busily revising and wracking their brains to get the grades they need to launch future careers.

Elsewhere, across the country, parents will be engaging in age-old arguments on the value of the modern exam system, grade inflation, did they help their child enough and just which subject really is the most difficult?

Lord Baker is one of these people. The former Education Secretary recently argued that the maths GCSE ought to be abolished in its current form. In its place he suggested a compulsory ‘core’ maths exam, focusing on basic numeracy, and a ‘further’ maths exam for the more mathematically gifted students that includes trigonometry, calculus and algebra.

Whether his suggestion is workable, Lord Baker has made an important point: developing basic numeracy skills is absolutely essential for life. Being a dab hand at quadratic equations or Pythagoras’ Theorem is incredibly impressive, but equally important is having a good grasp of numeracy and its real-world applications, from percentages and fractions through to compound interest.

Staying on top of your finances and developing effective budgeting skills is one such practical application. If we are to give our children the very best start in life possible, it is beyond essential that we teach them from a young age how to manage the money they are given.

Steps have already been taken in the right direction in legislating to include financial literacy on the national curriculum. Since September 2014, children in key stage 3 (ages 11-14) are taught about the functions and uses of money, the importance and practice of budgeting, and managing risk. Pupils in key stage 4 (ages 15-16) are taught about income and expenditure, credit and debt, insurance, savings and pensions, financial products and services, and how public money is raised and spent.

Though great in principle, the experience of schools suggests we could, perhaps, be doing more in practice. With pressures on school resources and crammed timetables, financial literacy often gets squeezed out of the day.

The groundwork has already been laid; it is a question of further incentivising the teaching of financial literacy. Maybe the solution is to create a compulsory financial literacy exam either as a separate module or as part of existing maths and general studies exams. Here students would be asked to demonstrate budgeting skills, explain the benefits and cost of different types of credit and (eventually) answer questions involving compound interest.

Picture that: children leaving school with a deep and certified knowledge of money and how best to manage it!

It’s also important to think about how financial literacy is taught, not just what is taught. In financial literacy lessons at present, is money still being taught solely in its physical form – cash transactions – rather than in its modern form – contactless payments and e-commerce – to fully equip children to join the cashless society? In IT classes, we wouldn’t just teach children how to use typewriters, so why would we allow the same to happen in financial literacy lessons?

What’s more, we must ensure that financial literacy lessons are taught in a hands-on, practical, fun and accessible way. Children mustn’t come to see money as an academic discussion or as just an exam subject. After all, it is something they will be grappling with for the rest of their adult lives.

Online shopping exercises, lessons in how to tell the difference between a BOGOF and 50% off and external speakers and trips to the local bank, for example, all bring the subject to life. Some schools, particularly those with enterprise or business specialisms, have already wound business and money management modules in to the curriculum.

Whilst this debate rumbles on, perhaps we need to look beyond the school gates. Perhaps, in the meantime, we need to be doing more at home. Well, to begin with, why not start by: