Money management lessons can pay dividends

Plans to include basic skills in managing finances as part of the reformed compulsory Maths GCSE could save your children up to £32,000.

Research from the Institute for Public Policy Research in the USA has found children given lessons on subjects such as financial planning, debt management and mortgages can end up with about a year's worth of earnings more than those who had not had the classes. That's estimated at around £13,000 for a single person or £32,000 for a couple with two children.

Unfortunately, the IPPR's research has only looked into benefits accrued when the children hit the 35 to 49 age group, so don't expect your student to become a financial whiz.

In fact, financial prospects for students is looking bleaker than ever, with the Class of 2006 owing an average of £13,252 (a 5% increase on 2005), according to a survey by NatWest bank.

That's significantly more than the £6,119* that this year's sixth formers expect to owe when they graduate from university, and about £1,000 less than the £7,208 last year's 18 year-olds anticipated, despite the introduction in September of annual tuition fees of up to £3,000.

The new Maths GCSE syllabus won't be introduced until 2010 but don't worry. You don't need to rely on school to teach your children about money management. Whether they learn from their parents or at school, children brought up knowing how to balance a budget are less likely to run up credit cards bills or get into other financial trouble in later life.

*Survey: The Association of Investment Trust Companies

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