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Main Content
A Farewell to the Piggy Bank?
Financial education in the school system strives to make a breakthrough by introducing pupils to financial and consumer issues
The old, greedy piggy bank has always been a token of a lost childhood, where naivety and simplicity were the rules of the day. For generations it was one of the most successful means to endorse economisation as children tried to meticulously accumulate their pocket-money in their personal savings. Yet as the adult world has clearly failed and is now characterised by the recent financial crisis that so vehemently torments the scaffolding of the EU, it also reveals that in the course of time something must have gone wrong on the individual level. The Greeks and Irish have already fell victim to financial ‘generosity’ as great sums of money were poured into the market as loans and mortgages were magnanimously and irresponsibly handed to misinformed consumers.
In an attempt to avoid a repeat of history, it is here that a new concept of financial education is trying to make a breakthrough by straddling responsible behaviour and micro-economics. A new concept in the realm of instruction and guidance in schools, its essence is to create an omnipresent awareness in daily transactions in banks, shopping malls or preferred modes of transportation. The reasoning behind financial education rests in the fact that pupils will sooner or later evolve into consumers that should avoid their parents’ mistakes. Unreasonable spending is especially common and can threaten the EU’s financial integration, but it is also preventable, or at least controllable
The idea of financial education was formulated by the European Commission, which urged member states to raise awareness on consumer protection, and was later reiterated at a 2006 EU’s Economic and Financial Affairs Council (ECOFIN) on the reinforcement of financial cohesion within the EU.
A survey on financial literacy in the EU27 notes that among other factors, occupational precocity, retreat of the welfare state, increase in life expectancy, and the introduction of a plethora of new financial products, render financial education essential on both individual (family) and systemic grounds (the market). For average citizens it could be of great help in understanding financial issues, who can easily themselves in an ocean of confusing and unknown terms that are easier to ignore.
Despite its benign intentions, the concept of financial education also has some philosophical connotations. More specifically, it reveals that economics in social relations tends to permeate most aspects of modern life, including education, in the contemporary world.
The content of education should thus extend to embrace new realms that reflect a broader ideological current - that of neo-liberalism and a general economism of the EU in a broad range of fields. Undoubtedly, national curricula have to adapt and include the management of savings or the basics of opening a bank account, alongside traditional courses such as mathematics, history or physics. The pedagogical mission of schools is to transmit knowledge in a variety of fields, including the practical basics of economics.
The question remains, however, can youngsters effectively internalise complex practices conducted by adults? Its answer is highly dependent on the teaching methods that are used to pass on the new knowledge and skills. The Soviet psychologist and social constructivist, Lev Vygotsky, believed that children could solve any kind of problem provided that they receive the proper adult guidance. In his speciality of proximal development, which was defined as the distance between the level of actual development and that of the level of potential development, game held a conspicuous position as the ideal medium for the transfer of skills and knowledge.
Taking Vygotsky’s beliefs into account, teachers emerge as important transmitters of information. In the case of financial and consumer issues where private companies and financial institutions have already failed or neglected to respect public policy, the school system can fill a new role by creating a solid framework that encourages lifelong learning. Yet the solution is not without its own potential pitfall – teachers may also lack the cognitive and theoretical background in the field or, alternatively, their knowledge may be outdated.
To avoid the situation, the EU has launched the DOLCETA Education Consumer Project that aims to familiarise teachers and pupils with consumer rights, product safety and financial services by offering on-line modules that engage users in an accessible and playful way. Additionally, school teachers and students of secondary education were provided with the Europa Diary, a useful guide that contains information on EU activities and policies such as consumer protection and financial issues.
If the EU proves to have some determination in the sector of financial education and help it to stick in the national curricula, the piggy bank may very well be a species on the verge of extinction.