When was the last time you sat in a classroom and learned how to file taxes or what goes into a mortgage application? Chances are, most of us didn't learn about these essential life skills in school, and yet, they impact our daily lives as adults. Taxes, mortgages, and debt are a part of the financial reality we all must face, yet many students graduate without a clear understanding of these concepts. So, the big question is: Should schools be teaching kids about taxes, mortgages, and debt? Spoiler alert: They absolutely should.
The Financial Skills Missing from the Classroom
Financial literacy is something that affects every single person. Think about how we start our adult lives: Many of us begin with student loans, credit cards, or the dream of buying a home. Yet, without basic financial knowledge, navigating the world of taxes, mortgages, and debt can be overwhelming.
Take taxes. In the UK, we know taxes are inevitable, but how many students actually know how to fill out a tax return, or understand the difference between income tax, National Insurance, and VAT? For example, a student might land their first job and receive a paycheck, only to be confused when they see deductions for things like PAYE (Pay As You Earn). It’s a reality check that could have been easily avoided with a bit of financial education.
Then, there's the topic of mortgages. The dream of owning a home is ingrained in many of us, but without knowing how mortgages work, how interest rates affect your payments, or what a deposit is, that dream can quickly turn into a nightmare. If schools incorporated these lessons into their curriculum, they would be preparing students not just for tests, but for real life.
Lastly, debt—it’s the elephant in the room. We’ve all heard the horror stories of people drowning in credit card debt or struggling to pay off student loans. In a world where debt is so easy to accumulate, it’s crucial that students understand the long-term consequences of borrowing money. If they grasp the concept of managing debt responsibly from an early age, they’ll be in a much better position to avoid financial stress later on.
Real-Life Example: The Student Loan Conundrum
Let’s take a moment to talk about student loans in the UK, a topic that affects millions of young people. In recent years, tuition fees have skyrocketed, with many students leaving university with debts of over £50,000. What’s concerning is that many students don’t fully understand the repayment process when they take out these loans. With interest accruing and loan terms extending for decades, many graduates are left with a heavy financial burden, often for years after their graduation.
In fact, a recent study found that nearly 40% of students don't fully understand the terms of their loans when they sign up for them (BBC News). This lack of understanding can lead to confusion when the loan repayment begins. What if students learned about loan repayments, interest rates, and the impact of long-term borrowing before they even applied to university? They might make different choices or at least be better prepared for what lies ahead.
What Should Be Taught?
It doesn’t take much to introduce the basics of financial education into the school curriculum. Here’s what could be included to give students a well-rounded understanding:
Taxes: Students could learn about how the tax system works—why we pay taxes, what taxes we pay, and how income tax is calculated. It would also help to demystify things like National Insurance, pensions, and VAT, and show how taxes contribute to public services.
Mortgages: As home ownership is a goal for many, understanding how mortgages work could help students plan better for their future. They should be taught about interest rates, down payments, loan terms, and what it means to be a homeowner.
Debt Management: This topic is crucial, as many young people find themselves overwhelmed with debt soon after starting work or university. Teaching the basics of managing credit cards, student loans, and personal loans would be invaluable. It could include things like setting up a budget, how to pay off high-interest debt, and when to seek help.
Practical Tools: Schools could even introduce real-life tools—like budgeting apps or calculators for estimating mortgage payments—so students can see exactly how the numbers work.
By incorporating these lessons, students would leave school not only with academic knowledge but with the practical tools to handle the financial realities of adulthood.
Objections and Addressing Them
Some might argue that teaching such complex topics isn’t the responsibility of schools or that there simply isn’t enough time in the curriculum. But, when we consider the financial challenges that young people face today, it's clear that these are skills worth teaching. It's not about adding extra burdens to an already packed syllabus but about integrating these topics into subjects like maths, business studies, or even personal development.
Others might feel that financial education is better left to parents. While it's true that parents play a role, not all families have the knowledge or resources to teach financial literacy. The school system is a level playing field where every student, regardless of their background, can access this essential knowledge.
Why It Matters
The reality is, understanding taxes, mortgages, and debt will affect every student in one way or another. Whether they decide to buy a home, take out a loan, or start a business, these financial concepts will be part of their everyday lives. Teaching students these skills gives them the foundation to make informed decisions, avoid financial pitfalls, and ultimately lead more secure, independent lives.
Side note: For students who might be overwhelmed with finance-related assignments, seeking out Finance Assignment Help UK could be a great way to gain better insight into managing personal finances and understanding the subject more deeply.
Conclusion: Preparing for Financial Reality
We know the world is changing, and the skills students need to succeed aren’t just academic—they’re practical. By teaching taxes, mortgages, and debt in UK schools, we’ll ensure that future generations aren’t just prepared for exams but for life. These lessons would help students make better financial decisions, avoid unnecessary debt, and build a more secure future for themselves. It’s about time we equip young people with the knowledge to take control of their financial destiny.
Read More: Is the UK Losing Ground in Global Education Rankings?
About the Author:
Zara Bolen is an academic writer living in London, dedicated to supporting students' academic growth and welfare. With a keen interest in financial literacy and student success, Zara advocates for integrating practical life skills into education. She believes that a solid understanding of personal finance is crucial for young people to thrive in today’s world.
