Increasing numbers of young people struggling with money management

When I attended school in the 1980s and early 1990s there were no lessons in money management and household finances, and as a result many of my generation entered adult life totally clueless about budgeting and living within their means.

I was therefore very pleased that back in 2008 education in personal financial management was introduced into Welsh classrooms for all pupils between 7 and 19 years of age. With personal debt in Wales at a record high, it is common sense that pupils are equipped with the vital practical life skills they need to manage their finances properly and avoid unnecessary debt when they leave school – especially with so many students having to face large loans to fund them through university.

But it is concerning that even with this education in schools, we are seeing increasing numbers of young people struggling with debt and money management.

Research in recent years has revealed that under 25s are showing worrying gaps in their financial knowledge relating to bank statements, overdrafts and interest on loans.

The most recent research from the Money Advice Service on the Financial Capability of Children, Young People and their Parents in Wales, launched during the Wales Financial Capability Week in November, found that many young people about to turn 18 are ill-prepared for dealing with adult financial responsibilities.

The research concluded that, generally speaking, children in Wales have a reasonable grounding in knowledge and understanding about money, including recognising some financial products and concepts and the value of money. Most youngsters are also cautious about debt, and have a theoretical understanding of the importance of savings and the concept of value for money. However, there are some aspects of financial capability that are less well understood, and some children who are doing less well than others.

There is therefore a clear need to ensure the education and support provided to children, and to those who help them learn about money at home and in school, builds on strengths and tackle areas for development.

We know that with the right help young people can learn skills to help them cope .The research found that children who gain experience of budgeting, spending and saving from an early age – in a safe environment – are more likely to be able to manage their money effectively as they begin to take on more responsibility for their own finances.

There is increasing recognition that what children see and experience at home, and in a wider social context, is crucial to their future financial capability. In particular, children are likely to be influenced from an early age by how their parents or carers manage their own finances, and also by how they are introduced to the concept of money.

We therefore need to support parents, many of whom are unsure of how, when, or why they should involve their children in money management.

Hopefully with the right education and guidance at both school and at home our young people won't find themselves in the difficult financial position that so many in North Wales currently do find themselves in.

For tips and advice on helping young people to manage their finances check out the Money Advice Service website at