![How young is too young to learn important finance and budget skills? Picture by Shutterstock How young is too young to learn important finance and budget skills? Picture by Shutterstock](/images/transform/v1/crop/frm/Fuxf4VmvfUmd225xeYC69T/c8135bb0-b9d8-4c37-87e8-c9c12edc24b8.jpg/r0_0_3456_2304_w1200_h678_fmax.jpg)
Attending Agricultural College in the early 1970s, I was taught many concepts that I would not use for many years to come.
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This begs the question, are you ever too young to learn farm management concepts, ideas and tools. Farm financial management is so important to the future success of the farm, I would prefer to start a little early rather than a lot later.
The critical element to learning is to have underpinning knowledge so the learning can be applied to varying situation. In learning, context is everything.
Recently I undertook my annual teaching of enterprise and financial management at Cleve Area School. The topics covered included, goal setting, livestock and crop schedules, enterprise gross margins, cash flow budgeting, balance sheets and business structures.
Not only did the students have to complete in-class exercises but they also had to use some of the tools in their assignments. Both of the student assignments were built on their own farm or Sim's Farm - the school's farm.
In teaching these skills, I was mindful most of the students may not use their learning in the immediate future, but they do have the benefit of a basic understanding of when, where and how to use the tools, they had learned.
The alternative, of living in ignorance of the essential skills and tools required for future life, should never be an option.
One exercise that always gathers the senior school student's attention is taking them through the exercise of buying their first car.
They identify annual fuel use, registration, tyre use, servicing, repairs, insurance to arrive at an annual running cost.
The concept of non-cash cost or depreciation of the vehicle is added, then divided by 20,000 kilometres to arrive a cost per kilometre.
Financing the purchase of a vehicle is fleshed out with various loan amounts and monthly repayments to the bank. This is what I call "time ready" learning as most students are about to enter this phase of life.
In assignment one, the students were required to develop an enterprise gross margin and then impose an intervention like a drought, poor yield or lambing percentage or a bumper year on the original margin.
The second assignment required the students to do a cash flow budget for the first year they were in the work force. This involved working on the family farm and doing some shed handing throughout the year and mum and dad allocating a 60 hectare paddock to be share farmed.
The budget also required the inclusion of all the personal expenses such as board, health insurance and social spending plus the purchase of a new ute. The purchase of the vehicle required a three-year bank loan with monthly payments required.
Possibly the most important thing I tried to impart was motivation to work in the fantastic industry of farming.
Without a motor under the human bonnet, the task of learning becomes ever so much more difficult to achieve.