APPRECIATING MONEY: Tawa Intermediate School pupil Jonty Boyd has been taught how to put together a budget and is excited about learning even more at school when the course becomes part of the curriculum.

Pupils could mortgage their school lockers, run sweet shops, and learn about personal banking and the sharemarket under an addition to the national curriculum.

The Education Ministry is introducing a financial literacy scheme into schools after a successful pilot programme.

Pupils will be taught how to manage their finances, about hire purchase contracts, interest rates, the ramifications of bad credit ratings, and the importance of financial planning and saving. Financial literacy will be taught through existing subjects such as maths, social sciences and technology to pupils in years 1 to 10.

The Retirement Commission began a pilot project at 10 schools last year including Wellington's Tawa Intermediate and Scots College to help young people develop money sense and counter New Zealand's poor savings record.

In one of the new teaching resources, pupils are encouraged to consider financial decisions and the consequences of owning a pet. They will also learn how to set up businesses such as making pickles, screen-printing T-shirts and raising calves.

Scots College teacher Paul Norman, who headed the pilot at his school, said the results were unbelievable. "It was an incredibly beneficial unit. The whole idea was for the boys to become familiar with financial terms and an understanding of what money is and the need to look after it. It was brilliant."

Mr Norman developed his own currency using a points system, which pupils could earn by completing tasks, such as schoolwork. He then introduced a banking and tax system. "The more they earned the more they were taxed. They weren't very happy with that, but I said, `Welcome to the real world."'

Pupils had weekly expenses in the form of fines if schoolwork was handed in late or if their school uniform was untidy.

They also had to take out a mortgage on their school locker and decide if they wanted a fixed term or floating rate mortgage.

"The parental feedback was incredible. The boys were asking questions about the length of their parents' mortgage and how interest rates work."

Tawa Intermediate principal Carolyn Stuart said many pupils now understood how hard it was for their parents to juggle their finances.

"I had some students who said they will never bug their parents for money because they now realise how difficult things can be."

The scheme will be introduced in August and will eventually include courses counting toward NCEA.

HANGING ON TO HIS MONEY

Jonty Boyd used to spend his money as soon as it was in his hand.

"I was pretty bad and would usually spend it at the movies or something like that."

But after taking part in a financial literacy course at Tawa Intermediate School, the 12-year-old has had a change of heart.

"Now I want to save for something big, I'm not sure what, but I still want to save my money.

"I'm still pretty average with saving because I don't get pocket money, but when my parents do give me money I really appreciate it.

"I'm less likely to go out and spend it straight away."

He has also been taught how to put together a budget and is excited about learning even more at school when the course becomes part of the curriculum.

"I am pleased I got the chance to take part."