The school day is relatively short, so it’s natural that some subjects will get less coverage than others. But the financial education of children has often been sorely lacking, with teachers leaving it up to parents to teach the fundamentals of how to save and spend safely. With the rocky economy we now find ourselves in, it is more important than ever that kids are taught how to be financially self-sufficient. Here are the three things we think they should be teaching about money in schools, and how you can help your kids in the meantime.
Not all savings are the same
ISAs, Bonds, Instant Access Savings, Notice Accounts… Even as an adult the choices can be confusing. So why are we suggesting these tricky concepts should be introduced to a child? Because when the Channel 4 programme SuperScrimpers asked people on the street, many had not even heard of ISAs, let alone knew the differences between each version. We’re not suggesting your kids should have an in-depth knowledge of each savings account, simply that they know they have options. And if you sit down with them next time you’re thinking about changing accounts, and talk them through what you’re doing, they will quickly learn how to go about researching their different choices.
Money doesn’t just come out of the Hole in the Wall
There was once a little boy who wanted a new toy. He asked his mum but she said she couldn’t afford it right now. The little boy thought about this for a moment, and then piped up happily, ‘we can just go and get some from the hole in the wall’.
What’s the lesson from this tale? Well, firstly it shows that kids are exceptionally optimistic. But more importantly it reveals the lack of awareness often shown by children about where money comes from. And the problem is growing rapidly due to the onset of credit and debit cards: teachers have reported that those kids whose parents pay predominantly by card are less aware of the value of money than those whose parents still hand over notes and coins.
Once they’re old enough, encouraging your children to take a part time job is one of the best ways to teach them where money comes from (and they will soon see how quickly it can be spent). But to help earlier on, make sure they are introduced to physical money, and talk with them about where your earnings come from. Even playing with the fake money in board games can be educational, but as you play, please remember…
Saving all your money isn’t always the answer
Don’t get us wrong; encouraging a savings habit is hugely important. But growing up with the constant message that you can never touch your money can be just as harmful as the idea that constant spending will fix everything. Some people have been known to save and save, whilst never feeling they could actually spend any of their hard earned cash. Such an attitude can encourage stinginess and create continual dissatisfaction with what you already have. A controlled spending habit, where you set boundaries and create goals, is one of the best ways to foster a healthy attitude towards money.
Are there other key lessons you think schools should be teaching kids? Let us know below.