Some say schooldays are the best of our lives. But we’re not doing enough at schools to make sure the next generation has learnt to be smart with their money in school.
Pythagoras theorem, how to use a Bunsen burner, the ability to analyse Shakespeare… useful for some, but how many of us have applied these in our daily lives?
In fact, how many times have you used them in the last three years?
Now, consider how often you’ve had conversations about mortgages or Googled for your credit score.
There’s a huge lack of financial education. And when you consider the impact bad money management can have throughout your childhood, it’s about time we flipped the script and got our younger generation fired up about money.
The property landscape is changing. The average age for a first-time buyer is now 34. That’s 6 years older than in 2007 when the average UK property price was £176,758. Now it’s £249,000! (ONS)
As prices rise, so do the deposits needed. So, while many used to turn their attention to saving pennies to get on the property ladder during their twenties, young people need to start saving far earlier if they aspire to own their own home or invest in property. That’s why we need to start teaching the fundamentals to the younger generation now.
Regardless of whether school-age kids want to get on the property ladder or not, if we encourage regular saving, educate on money management and learn about early investing, schoolkids will be well equipped with the life-long knowledge they’ll need to succeed financially.
It’s never too late to learn new things– we’ve built an entire business on creating free property education that’s easily accessible.
Many discover us too late. But we’re mega happy about the increase in young aspiring investors joining us over on the forum recently.
And this got us thinking about the stuff that school SHOULD be preparing us for.
So, we asked our Property Hub team what they wish they’d learnt at school.
If there are any teachers reading – feel free to use this as a lesson plan for a class or two. Your students will be thanking you for years to come.
‘Saving for a rainy day’ is often said by parents yet ignored by teenagers. And that’s understandable – it’s harder to imagine that hypothetical rainy day when you’re younger with less responsibilities.
But as we get older, we come to recognise the satisfaction – not to mention the necessity – of saving money.
A car, a holiday, a house… doesn’t matter what you’re aiming for – seeing that figure in our bank account increase is an easy way to boost our mood. But it’s a shame it takes some of us into our late 20s or early 30s to realise this.
That’s why it’s a good idea to begin teaching teenagers about the best ways to save their money as soon as they open a personal bank account.
Signing up for money-saving newsletters, opening an ISA (more on that later), being smarter on where and when to spend money, budgeting – teaching these things at a young age will encourage good habits, and dispel the idea that saving money is something you worry about when you’re older.
Credit scoring. It’s important – but many teens don’t understand HOW important.
Before they start taking the reins on their own finances, this conversation needs to be had. It’s all well and good being able to access mobile phone contracts, car insurance and popular interest-free payment services like Klarna. But missing a payment could affect credit profiles for years down the line.
Education on this will instil good traits and best practices from the very beginning. It’s even more important to students heading to university. That’s where they’re offered student overdrafts without getting details on repayments and applying for credit cards with huge interest rates…. the world of credit is fully opened to them before they’ll even have heard the words ‘credit score’, and that can end badly.
Making sure that credit scores, lending, and the importance of never falling behind on repayments are learnt in school will go a long way to preparing them for later life.
Several years ago, ISAs were barely spoken about. Now they’re frequently dropped into conversation.
But not many hear about the benefits of ISAs until well into adulthood. According to government stats, around 11.2 million Adult ISAs were opened in 2018-19.
If we’re allowed to open ISAs from the age of 16, why are we opening them far later in life instead of in our teens?
The earlier you save for anything, the better. And if schools taught the interest benefits of ISAs in class, we’d probably see loads more 16-year-olds open theirs and begin contributing before their 20s.
If you need proof that we’re missing out on educating students about ISAs, just look at the Help-to-Buy scheme.
Help to Buy ISAs were created with the sole purpose of convincing younger people in the UK to save for their first home. The scheme came to an end in 2019.
Despite a heavy marketing campaign, not many young people took action when the scheme launched but jumped to get involved once they announced it was ending – Nationwide revealed that in the final month before it ended in 2019, over 400,000 new accounts were opened.
Luckily for anyone who missed out, there’s still the option of a Lifetime ISA (LISA). The government will still contribute an extra 25% on top of what is saved IF the money is going towards to buying your first home.
But again, this information needs to be disseminated among students to be fully taken advantage of. It’s definitely something we wish we’d learnt at school.
Not many kids leave school understanding investments either. Investing is a considerable way to build wealth – so why are we not more open about it?
And we don’t just mean property investment.
While stocks and shares are considered more volatile, we can educate our younger generation to understand how how they can make their money work hard, as opposed to earning very little in the bank.
Apps like Freetrade and Trading 212 have seen great success recently. They simplify investing, and Trading 212 even let you ‘play’ at investing without real money via a practice account
There’s a need for this type of education – the signs are there already! On our forum, we’ve heard from a growing number of investors in their early 20s, who have got on the property ladder earlier than many of their fellow millennials. We’ve even interviewed some in the Property Hub Magazine.
They’ve all spoken highly about being less financially worried than their peers because they educated themselves early – something which would only increase if schools covered the subject of investments.
While cooking is a necessary life skill, we reckon there’s a case for property maintenance skills to be taught in school too.
Few millennials can confidently replace a plug socket, change a lightbulb, or even paint their fence without asking for advice. It’s no wonder that in 2019, the average landlord spent £1,443 on property maintenance.
In fact, we invested in a system that tells tenants how to do basics like this! And it helped with the many requests we used to receive through our lettings business.
Of course, some jobs need a trained and qualified specialist, like an electrician. But what about those smaller little DIY tasks?
DIY often results in saving money. So, the basics are a worthwhile teaching matter – if we’d learnt them in school, we’d have saved a lot of time later in life.
A recent survey of 2,000 millennials aged 23-38 revealed that over 50% avoided doing small DIY tasks because they’re ‘scared’ of making mistakes, and 3 in 10 admitted ‘they wouldn’t know where to start’.
As homeowners and landlords know, regular property maintenance can save money.
Say the word ‘mortgage’ to a teenager and see what response you get.
Maybe a look of confusion. Maybe they don’t care. Maybe it’s not important to them right now.
But it will be.
Most adults will want to buy a property at some point in their life. And by learning about the basics of the mortgage process, students will know, from an early age, they’ll need to keep an eye on their credit scores so they don’t negatively impact their chances of getting approved for a mortgage when they need it most.
An understanding of each stage will no doubt save stress and grey(er) hair when the time to apply rolls around. If we’d learnt this in school, we would’ve had far less nasty surprises later.
You knew it was coming, so we couldn’t not throw the 18 Year Property Cycle into the mix. And if we had our way it would be taught in every secondary school in the country.
Understanding that the property market is cyclical and moves according to well-understood trends, would help young adults make more sensible and educated decisions when buying a property.
A lack of awareness of when we’re in a boom or when we’re on the cusp of a crash can lead to people making wrong decisions. But if we’d learnt how to spot it while in school, we’d be better prepared.
Confidently being able to look at trends and understand where we’re at in the 18-year property cycle, and subsequently know whether it’s the correct time to buy/invest, will make the next generation far more savvy.
So, it’s safe to say there’s lots we’ve learnt as adults that we could’ve done with knowing earlier. The above was just a fraction of what some of our team wish they’d have known many moons ago.
But if they say youth is wasted on the young, then it’s our job to make sure experience isn’t wasted on the mature.
Taking the knowledge we’ve acquired over the years; we should be striving to pass on our experiences (good and bad) on property investing to the next generation. And that’s why we do what we do.
Head over to the forum and let us know what you wish you’d learnt in school. Sign up now, it’s free!