Financial literacy in kids
Ah pocket money! The fiercely debated topic between parents in the school pick up line. Should your kid get pocket money? If so, how much? Should they have to do chores for it or is it their right? Everyone has their own opinion and rightly so.
I was interested in the thoughts of the parents at my own child’s school. After subtly bringing up the topic, I was surprised by some of the passionate responses I received. They ranged from “my child should jolly well do his chores without being paid to do them!” to “Oh yeah, he gets $50 a month” to my personal favourite, “We always threaten to take away her pocket money if she doesn’t do her chores but to be honest, I don’t think we’ve ever actually given her any pocket money”.
On the drive home, I started to think about where you could go to get guidance on teaching kids about money. I couldn’t think of one single place off the top of my head. The more I thought about it, the more this realisation bothered me. Recent studies have revealed that arguments about money and financial difficulties were the number one predictor and reason for divorce. Financial stress often leads people, particularly young people, to take up unhealthy coping mechanisms such as drinking, smoking and sometimes drug taking. Ultimately, high financial stress levels can have a huge impact….from heart attacks to lack of sleep, depression and thoughts of suicide.
As a society, we take much care to ensure our youngsters are well schooled in maths, English and science, all of which are very important, but largely we ignore financial literacy in our children. By doing this, do we rob of them of learning these life skills early enough to be truly beneficial when they need it most? At 17, some will purchase their first car to drive to their first job. This will be followed by their first credit card and then somewhere in their mid-late twenties to early thirties they may look to venture into the world of first home ownership.
As we work in the finance industry, my husband I are passionate about educating our children about money as early as possible. We want our kids to have choices. The simple truth is, that when you are in a stable financial position, you have more choices. Mostly, we want them to have respect for money.
When each of our boys was born, the first thing we did was open an account for each of them. Each payday we put a small amount in each boys’ account by automatic direct debit. It’s a small amount to us but over the course of a year it equates to about $1,000 for each boy. By the time each boy is 25 he will have a minimum of $25,000 for us to gift him to assist with purchasing his first home.
I cannot help but wonder, if we as a society started financial guidance early, as early as we start educating children to read, could we save them from a possible future of heartache and stress they don’t necessarily have to face? Well it would seem that some colleagues at Beyond Bank were having the same thoughts. My husband and I were thrilled to learn that shortly Beyond Bank will be rolling out a new Financial Literacy program for our schools. Although ‘school banking’ exists in most schools, sticking a few dollars in a piggy bank doesn’t necessarily teach kids about finance and budgeting. The Financial Literacy Program will use age appropriate language to teach kids the basics of money. Using fun imagery and interactive games, the program will encourage the children to value their money and start a pattern of saving.
If your school has chosen to take up the program, I strongly encourage you to get involved as a parent. The information learned will be extremely valuable for our children and who knows, it might even encourage a few to do extra chores around the house, without you even having to ask! But best of all, you are ensuring they learn a skill that can make a real difference over the course of the rest of their life.
If you want to find out more about Beyond Bank’s financial literacy program ‘More than money’ please visit education.beyondbank.com.au