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The Big 13 – Financial Literacy

How do you manage a budget? How much do things cost? How much do you need to live? What is profit and loss?

Developing a real awareness of how the world of money works is vital for a young person. While ever an endless source of materials, resources and funds seem to abound from home and school to meet their requirements then they are not developing the knowledge and awareness of the ‘real world’  that will give them purpose and motivation for studying and working.

Learning about how to manage money in a practical way can be fun – but the lessons are very real: nothing comes for free, you can work hard and improve what you had, and sometimes things go wrong and you have to start again.

Dalton Foljambe Five Pound Project

Pupils at Dalton Foljambe are used to solving problems and making decisions. The school’s enterprise co-ordinator Kerry Ford has a background in industry and has taken a strong lead in developing enterprise within the curriculum. Children enjoy creative teaching and learning and are often afforded the opportunities to make decisions for themselves and learn from the consequences. In addition to this the school also provides stand alone ‘explicit’ enterprise activities such as ‘Challenge Days’ and, recently a ‘Five Pound Project.’ The basis of the Five Pound Project is to develop financial awareness and planning abilities and allow pupils to take responsibility for a budget.  Pupils take ownership from the start – generating ideas and deciding whether to act as a sole trader or form a partnership of up to three children. Then they undertake market research, write a business plan and make profit and loss forecasts.

At Dalton Foljambe, the project built on work the children had completed previously through Young Enterprise’s ‘Our World’ activity. They were familiar with the concepts of Product, Place, Price and Promotion, and built this into their plans. Kerry said:

“This was not unfamiliar because they had the grounding through the previous project, but there was a lot of excitement about being given ‘real’ money to deliver their ideas.”

Children planned and organised themselves, ready for a week long stint of rolling out their products and services to the rest of school. Amongst the contenders was a car wash service and biscuit sellers. Kerry said:

“What was most beneficial for them was the problem solving along the way. You could see how they were identifying what wasn’t working and thinking of ways around the issue. The car washers were inundated at first because they only charged £1.50 – they couldn’t keep up with demand, and yet their profits weren’t huge. After further research they realised as long as they didn’t charge as much as their nearest competitor up the road they would still be popular because of the convenience of providing the service to staff on site.”

The need to adapt to survive is essential in a competitive and fast changing world. Just as importantly for the children they were handing their own budget and taking responsibility for how and where they spent their money. Kerry said:

“Things got better as the week went on, customer service improved, the quality of goods improved. They realised if they were asking for something – money – they had to give something worth having back. They all made their five pounds back. It was such a good experience for them we all said we would loan them the money to do it again!”