Why is financial education important?
Parents worry about most things, but how we introduce our kids to money is something that tends to creep up on us. We begin to wonder when we should start giving money to our children. Then how much exactly, and for which chores. We start to worry about the example we’re setting our kids, along with the lessons we’re teaching them and what kind of impact they’ll have down the line. Is it enough to just give them a piggy bank and let them scout out coins down the backs of sofas? Or should there be something more formal?
Like coding, I believe that managing money in a digital world is a basic 21st-century literacy, and one our children can’t afford to miss out on.
When I was growing up, physical money (coins and notes) made this great abstract idea tangible. You could hold it, feel it, taste if you wanted. You got a sense of what was a lot and what was a little. But in a cashless society, we’re losing a hands-on portal into the financial world.
In the UK alone, young people are the fastest growing group of debtors. Yet, financial education is widely overlooked in elementary and primary schools. In fact, in most schooling systems around the world money only becomes part of the curriculum after 11 years-old.
Meanwhile, the OECD (Organisation for Economic Co-operation and Development) has shown that even in mid and high performing countries, one in four students struggles with the simplest of financial responsibilities — from recognising the value of a budget to understanding a bank statement or pay slip.
“Young people today face more challenging financial choices and more uncertain economic and job prospects, “ said OECD Secretary-General Angel Gurria. “However they often lack the education, training, and tools to make informed decisions on matters affecting their financial well being.” As a parent, this troubles me. I know it troubles many of you too.
A question I often get asked is, can you teach financial education at a very young age? And the answer is, ‘Absolutely.’ Research from Cambridge University shows that good — and bad — money habits are learned by the age of seven, and another study shows that kids can understand the concepts of price and value as early as 5.
And we know from our experience of building Cubetto that the earlier you teach kids a skill, the bigger the impact later in life — financially literate children become financially capable adults.
In case you don’t know it already, Pigzbe is a handheld ‘piggy-wallet’, an educational app, and a new digital currency (Wollo). It’s designed specifically to teach children ages 6+ the building blocks of saving, earning, budgeting, spending and sharing in a hands-on way.
For parents, Pigzbe is an easy way to send digital allowances and pocket money whatever the amount, from anywhere in the world. The Pigzbe app lets you set different tasks and chores for your kids to complete, matching specific rewards to specific tasks. At the same time, Pigzbe lets your children touch what they’ve earned with the help of the Pigzbe device, keep up with their savings goals and learn to budget away from the screen.
For more on how Pigzbe teaches children about money, and the upcoming Pigzbe Kickstarter, head over to http://pigzbe.com
Filippo, Piggy-In-Chief at Pigzbe
p.s. If you haven’t already, enter the Pigzbe mega-giveaway — a $1,500 educational toy bundle ready just in time for the Christmas holidays!