Financial education: preparing young people to make money choices
The financial world young people are growing into is changing quickly – and the way we learn to pay, borrow, shop and think about money is changing with it. In this article, we explore what this means for young people’s early financial experiences and for delivering financial education from a young age.
How the digital world is changing young people’s money choices
The experience of making a money choice looks different for young people today. Let’s think about a choice like buying a new pair of trainers online. It might start with something we see on social media, while we’re scrolling between a friend’s post, an influencer’s latest unboxing and an advert that feels more like entertainment than an advert. When we decide to buy, we can pay with a simple click on the side of our phone, and the option to spread the cost over several weeks might be sitting right next to the option to pay in full now.
Easier ways to pay can make life simpler, credit can be a useful financial management tool, and social media can be a brilliant source of community, information and ideas. But put it all together and the experience of making a money choice looks quite different. Seeing something, wanting it and finding a way to pay for it can all happen in just a few minutes.
We’re seeing the wider financial world respond to these changes too. This summer, stronger consumer protections were introduced for Buy Now Pay Later borrowers, following the decision to bring the sector under FCA regulation, including areas around affordability and the information people receive.
For financial education, changes like these matter not because they are giving young people new financial rules and products to understand, but because they’re changing the context in which everyday money choices happen.
financial knowledge is only part of making money choices
It’s clear that financial knowledge matters. Young people need to know what financial products do, what they cost and where to go when they need more information or support.But eventually, that knowledge has to meet real life.
A young person can understand exactly how credit works and still have to decide whether something is worth borrowing for. Knowing the repayments and the overall cost helps them make that choice, but it can’t tell them how much the purchase matters to them, what else they might need the money for or whether they’re comfortable making that commitment.
Budgeting works in much the same way. We can teach someone how to make a budget, but we can’t fill in all the lines for them. At some point, they have to decide what matters. Putting £20 into savings might be a good choice, but spending it on doing something with friends might be a good choice too.
That’s where emotional awareness, judgement and critical thinking come in. Real life rarely gives us a financially correct answer and a big red ‘beware’ sign next to everything else. Young people need to be able to understand the options, think about the consequences, notice what might be influencing them and make a choice that works for them.
This is particularly important in today’s digital world where there is so much noise around a money choice. A purchase can be about enjoyment, convenience, belonging or keeping up, as much as what something costs. Our families, friends, feelings and experiences all shape the way we think about money – and social media adds plenty more voices to the mix.
Recognising those influences isn’t about teaching young people to be suspicious of everything they buy or making them feel guilty for wanting things. It’s about giving them enough space to work out what they think. Good financial education needs to think about both what young people know about money, and what that knowledge enables them to do.
what this means for financial education
As the financial world changes, it’s tempting to respond by adding more to the list of things young people need to know. A new way to borrow becomes a new lesson on borrowing, and a new kind of financial risk becomes something else to explain.
Of course, financial education needs to keep up. But is also about helping young people use what they know when money gets mixed up with everything else going on in their lives.
We see that in our own work here at Just Finance Foundation.
A conversation about budgeting can quickly become a conversation about what someone wants to spend their money on, what they’re saving for, what their friends are doing or why something feels worth the money to them. That isn’t a distraction from learning how to budget. It’s where the learning becomes useful, practical and applicable in the real world.
That’s why we believe financial education needs to develop knowledge, emotional awareness and critical thinking together, while making space to explore the feelings and influences that shape our choices. Young people need to understand their options and the consequences that come with them,
but they also need to feel able to question what’s in front of them, weigh things up and work out what makes sense for their own circumstances and aspirations.
We don’t know exactly what the financial world young people will grow into will look like in 10, 20 or 30 years. New products will appear, technology will change and the way we use our money will keep evolving.
Financial education can’t give young people an answer for every choice that’s coming. But it can help them become ready to make those choices, wisely, for themselves.
Just Finance Foundation exists to change how children grow up with money.
Every day, children are learning about money - through what they see, hear, and experience - but not all of it builds confidence or choice. By supporting parents, carers, and educators to teach money in ways that are simple, practical, and engaging, we make financial learning part of everyday life. This means children can grow up confident in making choices and equipped with skills that support their wellbeing now and into the future.