We look at how financially prepared they are for the world ahead of them
As part of our community initiatives to educate and support the UAE with financial planning and understanding, Finsbury Associates has kicked off a Money Skills campaign aimed at Year 13 students leaving school this summer.
All of the students who took part said they found the workshops extremely useful, however it was interesting to learn that only 45% have had any sort of budget education or advice. The consequences of low levels of financial literacy can be significant. Low financial literacy when leaving school, is linked to a host of negative credit behaviors, including higher borrowing rates not to mention how financial stress and credit card debt have been tied to an increased likelihood of missing lessons and dropping out of university or college.
We asked students what their plans were upon leaving school this summer.
Over 95% of students plan to continue with formal education, which along with UCAS (university admissions) figures in the UK, reflect this as a record high for students continuing their studies. 32.6% of the UK’s 18 year old population will be entering university or college education of some description. That’s a huge number of young people from all walks of life in further education. But it’s also a huge number of young people taking control of their finances, most for the first time.
How many plan to remain in the UAE?
Of the students we talked to less than 10% plan on staying in the UAE with over 50% heading to Europe, 19% to Canada and 10% to Australia
With so many different destinations, we were surprised to learn that no one knew what FX was? (foreign exchange). So it’s no surprise that students were mostly unaware of the impact this would have on their day to day finances. In particular, how the rise and fall of the dollar or home currency could leave them with a very different bill to what they were expecting. The strain on a student’s finances, if they are subject to home country fluctuations, could make or break their chances of succeeding with their self or partially funded further education program, travel plans or next venture.
And so the question of funding becomes even more important…..
15% of students say they will be funding their own education, with 20% saying they still don’t know.
It is vital that all students are taught the basics of financial planning
Whatever students choose to do when they leave full-time education in the UAE, it is vital that all students are taught the basics of financial planning. For many, this will be their first time away from home, friends and families so it’s important that we support students and make sure they’re financially aware so they can avoid the stress of poor budget management and enjoy their next step into the world.
What can we do to prepare them?
- Include kids in financial decision making
- Share your top financial reads with kids, whether it be Bloomberg, FT, or other trusted publication
- Make the time to discuss money with your kids – it might not be as exciting as the Ipad, but it’s often received as a genuine sign of respect and care.