Although the curriculum in many schools, colleges and universities is very varied and useful for future career prospects, it is fair to say that many young people leave education with little idea about financial planning when they start earning. Most people learn the basics of financial planning from commercial companies that are actually trying to sell financial products, but is the language easy to understand? Some might say no.
A main element of financial planning is looking to the future and protecting what you have; this can include everything from balancing risk in the stock market, securing a high-interest account and even products like income protection insurance. So, the question is, is there room in the education sector for a little financial planning advice? It could be a one-off lecture immediately before graduation, or, more effectively, easy-to-digest literature from a trusted partner distributed and displayed across campus on an ongoing basis.
Aspects of Financial Planning that Young People should know about
The list below is by no means exhaustive, but contains a few pertinent things that every person leaving education should have a basic grasp of:
- Budgeting – This is financial planning at its most rudimentary and involves setting aside enough money for essentials like rent, bills, etc, before spending on anything else.
- Credit Card Awareness – It’s very easy to just ‘put things on the card’ when shopping or eating out, but that money needs to be repaid, and there are heavy interest payments if the balance is not paid off in full every month.
- Insurance – Although not strictly a financial product, insurance is a safety net if things don’t go as planned. Products such as income protection insurance will pay out up to 70% of salary if the policyholder is unable to work as a result of illness or injury. This is especially important for those who have a young family or other financial dependents. Insurance premiums are generally much lower for younger people, especially in regard to things like life insurance or health insurance.
- Savings and Investments – Wherever possible, it’s a good idea to get impartial advice about the best investments. Savings account information can easily be found online and compared side by side on non-affiliated comparison sites.
Prepared for Life
Aside from teaching students their core subjects, it’s the role of educators to help young people prepare for life, and this can include the basic tenets of financial planning. By giving young people sound financial pointers, they can go out into the world with a good idea of how to manage money. The information imparted doesn’t have to be in-depth or contain specific ‘how-to guides’, just a concise briefing on the basics.
In answer to the question, “Is Financial Planning something that should be taught to Students?” The answer is, it depends. Some students may have a better grasp than others of financial planning, so perhaps the best course of action may be to offer periodic seminars or lectures that people can attend if they want to learn more.