Financial literacy for Children
By Dodwalker on The Capital
Could this be one of the most important life skills we pass on today?
This is a really good question, as I think about parenthood one day and as I think of the life skills and behaviours that I’m trying to pass on and develop in my god children, nieces and nephews, it’s one that I constantly come back to.
Why is this keeping me up at night?
What we see today is that for the first time in living memory at least, the generation starting their adult lives today is not expected to be financially secure as their parent has been.
It’s a nightmare scenario that could affect generations to come.
Terms like generation rent really do keep me awake at night with concern for the future.
What’s the resolution does it sit within mainstream education?
Well, it really has to be education in some shape or form. Along with trade or business skills, financial literacy is totally missing from mainstream education today, and I don’t see that changing anytime soon.
So if the school system isn’t going to educate children on its own, what are the options to bring financial literacy into schools?
Financial institutions can do a lot to help, but at the same time, there is a level of trust still missing since the 2008 financial crash. People struggle to trust banks with their hard-earned cash, never mind their children’s preparation for adulthood.
Still, there are a lot of materials, resources, and literature out there provided by these institutions to help give kids a good grounding in financial literacy. Opening a children’s saver account with a bank or building society with those resources can be a great first step.
As members of the public, we can be more vocal about the issue and push for 1 hour per week in junior and senior schools where a bank, building society, or non-profit organization comes into play.
Think there is nothing in it for the bank? Think again, it gets savers early, so it has more money to invest. Those savers have less risk attached to them, so they become good investments later down the line. That sounds cynical, but it’s TRUE.
It also happens to be a win-win situation.
If the system isn’t supporting this, what else can we do?
Luckily there are other resources out there, some great books written for adults like the richest man in Babylon for example by George S Clason is a classic example of a book that presents financial literacy in such a simple way that it crosses over to young teenagers and early adults very well.
There is, however, a gaping hole in the market for children’s literature on the subject, which remains to be plugged. This is no huge surprise, given how difficult it is to get children and parents alike hooked on a book about money.
Other than this, it’s leading by example, showing the next generation how to save, how to invest, how to build a secure financial foundation for life.
In the UK, for example, you can invest in premium bonds with children, which is a safe and fun way to build an investment for them with as little as 10 pounds or 12 dollars.
It’s a pretty daunting task for me as I see it personally and something which I need to focus on with my loved ones, but one that when I look at the world around me, I’m getting more and more passionate about it.
