praxis

The financial education of young people in Germany leaves a lot to be desired. Despite their affinity for digital technologies and the latest trends, many young people lack the basic knowledge they need to manage their money sensibly. A study by the Organisation for Economic Co-operation and Development (OECD) provides impressive evidence of this: a significant proportion of 15-year-old students in Germany are unable to make basic financial decisions or understand simple financial concepts. In view of these alarming findings, there are repeated calls for the introduction of a new school subject called “financial education”. But is this really the best solution?

A school subject “Financial Education”: Promising, but not without pitfalls

The introduction of a school subject called “financial education” could ensure that all young people learn the necessary basics about saving, investing and managing money responsibly. Such lessons could provide knowledge in a structured and systematic way that goes beyond pure mathematics and promotes important life skills. In an increasingly complex financial world, it seems imperative that young people are prepared for these challenges. A compulsory school subject could play a crucial role in this.

But this solution also has its downsides. One frequently raised criticism is that the curricula are already overloaded. The introduction of another compulsory subject could increase the pressure on students and teachers. There is also the question of implementation: who should teach this subject? Very few teachers are likely to have the necessary expertise in financial and insurance issues, which would mean that extensive training measures would be required – or external technical input. More on that in a moment. Without qualified teachers, there is also a risk that lessons will become too theoretical and far removed from practice, which could miss the actual goal of increasing students’ financial literacy.

Financial education at home: Practical, but not accessible to everyone

In addition to school, the home plays a crucial role in the financial education of young people. Parents can teach their children how to handle money in a way that is directly anchored in everyday life. By planning the family budget together or saving for specific goals, children can develop an early awareness of the value of money. This practical teaching can help to transfer theoretical knowledge into reality.

However, this is not possible in all families. A study by ING-DiBa from 2019 shows that more than half of the young people surveyed in Germany feel insecure about financial matters. Young people lack the necessary knowledge, particularly in the areas of retirement planning, taxes and lending. This insecurity can often be attributed to the fact that not all parents have the necessary knowledge or time to provide their children with a solid financial education. This inevitably leads to large differences in financial knowledge among peers and can increase social inequalities in the long term.

Extracurricular programs and workshops: Flexible, but not comprehensive

Another approach to promoting financial education among young people is extracurricular programs and workshops offered by non-profit organizations, banks or companies. These programs offer young people the opportunity to deal with financial topics in a targeted and voluntary manner. The great advantage of such offers is their practical relevance and flexibility. Young people can immerse themselves directly in the subject through interactive and exciting formats and immediately apply what they have learned.

However, these programs also have their limitations. Such services are not always available across the board, and not all young people have access to them, especially in rural areas or in socially disadvantaged families. In addition, they are often voluntary programs, which means that the very people who could benefit most from them may not participate at all.

An integrated approach is needed

A separate school subject called “financial education” could be a step in the right direction, but it is far from the only solution. To really improve the financial education of young people, an integrated approach is needed that involves various actors. Schools should provide basic financial education, parents could deepen this in everyday life, and external programs could provide specialized knowledge and additional practical knowledge.

Only through such cooperation can we ensure that the next generation not only acquires theoretical knowledge, but also develops the ability to apply this knowledge in everyday life and start adult life financially confident. It is time to raise financial education in Germany to a new level – and this can probably only be achieved through the interaction of all the forces involved.