Philosophy Tristan on 11 Dec 2008 06:29 pm
Teaching children about money
The current global financial crisis is causing many families around the world a lot of heartache, thanks to the increased stress of either job loss / threat of job security or simply because of the lack of easy credit which many have become accustomed to. How could this have been avoided? How can future generations avoid this cycle of boom and bust? I believe, and I’m sure there are others out there that believe this could be avoided in the future by teaching children about money.
Most children learnt about money from their parents, and most parents don’t have a clue about money. Their beliefs are inherited in many cases or learnt through hard lessons, generally not from reading about how money works, how to save / invest money and how to live frugally.
The world would be different if we all learnt about money, the same way we learn about maths, history, geography, french and a host of other pointless subjects that are deemed more important by the educational establishment.
From the age of five, kids could be taught some very simple lessons on the following subjects:
- Saving Money
- Making Money
- Spending Money
Saving Money
Kids could be taught how to “pay themselves first”, save a fixed portion of their money each month for a rainy day. This could be demonstrated by getting parents to give the teachers their “spending” money for each week, and then deducting x% each week and putting it into a piggy bank. At the end of each month, the kids could see how much money they had saved, and get an understanding over time of the virtues of saving. This would work especially well if the kids were all encouraged to think of something they wanted to buy with their savings at the end of each term or academic year.
Making Money
It would be very difficult in school to get the educational establishment to teach children about entrepreneurship at first, but it would be a good place to teach kids about getting a good education so that they would get a good job, so that they could earn more money, and therefore save more money.
The kids could also take part in some kind of group learning whereby they could all choose a different career, which could give them an income (pretend of course), and then show them how much more money they could save by having a better job.
It might be that entrepreneurship/building a business could be more of an advance subject, taught at the teachers discretion or with the parents permission. I personally believe that working hard all your life in a job is a little outmoded, but a good education is a necessity and certainly helps in running a business.
Spending Money
I don’t mean “teach kids to spend money”, moreover, teach them how to spend their money wisely, so that it goes further - the lesson of frugality! This is a lesson that was rammed down my throat so much as a youngster, adoloscent and young adult that I suspect I rebelled against it. I always thought it was simply my parents and grandparents worrying too much!
I expect there are many people who have heard all the same old sayings such as “watch the pence, and the pounds will watch themselves”, a favourite of mine. I always thought it was a little stupid worrying over a few pence, and as a result, I’ve always given any loose coppers to the charity box whenever I’m buying something. I wonder how much money I’ve given away over the years (probably less than £100!).
Now as an adult, I can appreciate the lesson that the saying attempts to teach. By not spending money you don’t need to, you will have more left over, thus making it easier to save larger sums of money. I went through financial difficulties earlier this year, and I found that by simply price checking everything I bought in the supermarket, watching where I bought my petrol from to ensure I bought the cheapest and making a few alterations on the monthly bills, including cancelling things like Sky TV, I was able to save well in excess of £100 a month, each month. Now that is a good way of watching the pennies and having your pounds watch themselves!
If kids were taught how to handle money from an early age, I’m sure when they grew up and become politicians, investment bankers and other captains of industry, they would have more of a clue how to avoid the mistakes that keep getting made by the “so called” leaders of our society.
