Make financial literacy part of new school curriculum

We await further details on the government’s plans to develop a new national curriculum to better prepare Barbadian students for the modern world and workforce. Such details being so far sparse, we take the opportunity to suggest that one critical component that must be included is financial literacy education.

The consequences of the knowledge gap in personal finance and money management skills can be seen in the high levels of personal debt, insufficient savings rates, and lack of investment and wealth-building in Barbados. And in another few months, many young Barbadians will once again leave school unprepared to make wise financial decisions as they enter adulthood.

Financial habits and mindsets are primarily shaped by the environment and communities we grow up in. Without exposure to sound financial principles at home, far too many Barbadians never learn the building blocks of managing money effectively, the importance of saving and investing for the future, or basic economic principles.

Introducing a comprehensive financial literacy curriculum from an early age would help instil these crucial life skills in our youth. Students would learn about budgeting, banking, cooperativism and the credit union movement, building credit, building equity and net worth,  managing debt, saving and investing strategies, understanding taxes and insurance, and even pensions and retirement savings. Armed with this knowledge, they can avoid many of the financial pitfalls that plague too many Barbadian households and make educated decisions to build and pass on wealth.

Improving financial literacy can also be a powerful tool in our efforts to alleviate poverty and help more Barbadian families build generational wealth. The 2021 census puts over 16 per cent of the population below the poverty line. Decades of socioeconomic disadvantage have made it extremely difficult for many poor folks to escape this cycle on their own.

Equipping young people with money management skills early can empower them to increase financial security and embrace opportunities like homeownership and investing. Over time, this can help break the systemic patterns of poverty that have persisted for generations. Those who grow up with healthy financial habits and knowledge tend to achieve greater prosperity throughout life.

Critics may argue that there is already too much curriculum material to cover core subjects much less the vaunted ‘job-earning’ studies. Surely, financial literacy is equally as vital as mathematics, language arts, sciences, other traditional courses, and subjects off the current, well-worn track. The ability to earn, manage and grow one’s money is a critical life skill that underpins success in nearly every aspect of an individual’s future well-being.

The fact is that people with higher levels of education tend to achieve greater lifetime earnings and wealth accumulation. Postgraduates tend to earn more than undergraduates who tend to earn exponentially more than secondary school graduates who earn way more than those with only a primary school education. Yet all of them, regardless of education status need to know how to manage money. This is not a subject disdainfully appropriated for ‘at-risk’ youth or less academically inclined. A PhD with lousy money management skills is no different from the spendthrift third-form school leaver.

Financial literacy from primary school onward can begin to put the next generations on more solid financial footing from an early age. They need to be better prepared for economic independence, homeownership, investment and securing a stable retirement.

The government’s own foray into share ownership through the divestiture of state enterprises and the creation of shares on the Barbados Securities Exchange (BSE) continues to falter some 32 years after it began with Pine Hill Dairy/Barbados Dairy Industries. Because generations of Barbadians continue to see money in the bank as superior to a diverse portfolio. This has to change.

Other countries around the world have already embraced financial education, from basic money lessons for primary students up to more advanced personal finance, investment and entrepreneurship courses at the secondary and tertiary levels. Barbados risks producing financially illiterate adults falling behind our regional and global peers if we fail to follow suit.

But there’s an opportunity —- curriculum redesign that introduces financial lessons early to put the next generation on a more solid footing from the start. A strong, comprehensive financial literacy component spanning all class levels, from pre-school and primary to post-secondary and continuous adult education. The long-term benefits of reducing debt loads, increasing savings and investment rates, promoting overall economic empowerment, and helping break generational cycles of poverty will pay dividends for a more prosperous, progressively independent nation for us all.