Write calligraphically! Don’t cross the lines, learn to talk about your emotions, you need to know all the capitals of the world. Math is heaven to know if you don’t want to be fooled. However, among dozens of subjects, recommendations, and skills, the school teaches us far too little about money. Early financial education rarely finds its place in the school curriculum.
If at home the parents started their financial education late in life, the problem of financial education for children becomes even bigger.
According to experts, by the age of seven, most children can already understand how money works and the basics of managing them. For example, in Singapore, this is the time when children start managing a daily allowance for primary school.
Even so, children’s attitudes towards money should be formed by this age. This means that if you want your students/kids to be careful with money, you need to teach them the value of money as soon as they are able to count.
With International Financial Literacy Day just celebrated, have you ever wondered what school should have taught us (in time) about money to establish financial habits that will help us throughout our adult lives… and didn’t?
Here are just a few aspects:
You actually don’t need a “reason” to save
If this would be transmitted from a young age it would be wonderful for the future of our children.
Saving is usually considered with a goal in mind, be it a house, car, or a much-desired holiday. Speaking about children, it can be for a much-desired gadget or toy.
Of course, saving for a goal needs to be passed down to the kids. But given that we are preparing them for an unpredictable world, saving should be more of a life constant with long-term goals. Let it be a healthy habit that children are accustomed to, regardless of age.
The ability of children to understand saving should start early in their life, or that saving only brings advantages: from flexibility in uncertain times to eliminating strong stress in unforeseen life situations should also be learned at home and school.
You are your most precious “investment”! Invest (also) in yourself!
At any stage of life, it is very important to invest in yourself. Children must know this through the power of example from parents and teachers!
The success of your financial plans is based on your human capital, your ability to perform well, and work, thus being paid well/better.
You are the greatest creator of wealth. And then everything related to your physical and emotional health or education are not “expenses” but pure investments for the future.
There is good debt and bad debt
Did you know that Generation Z has the lowest average credit card debt of any generation? While that’s good news worldwide, it’s also because this generation saw their parents in debt. Debt is a huge financial burden that too many families carry.
The most important thing is to understand what is a “good” debt compared to a “bad” one.
“Good” debt can be – education loans (a good college), or balanced mortgages. “Good debt” can relate to an asset, a good that once bought can increase in value over time.
“Bad” debts can be – a huge credit card balance for clothes purchases, spending on dining out; or just for pleasure and entertainment.
This should be a lesson that should not be missing from our children’s early financial education.
Don’t keep the money in a mattress/ cash!
Invest instead! Investments are absolutely necessary. Learning to invest is the key to getting rich slowly but surely.
Children learn the concepts of investments much faster than we think. About how the money we have should be protected or put to work for us. Kids can be taught about opening a deposit, stocks, and bonds and now why not cryptocurrencies? We must not fail to convey concrete information about the risks and that simply keeping money in cash at home is never a solution.
Diversifying your portfolio (to reduce risk), minimizing certain losses (fees), and removing emotion from investment decisions are all very helpful pieces of information.
Don’t borrow to buy a car
Although it may not seem like a topic for debate in schools, it should be. We see people around us every day who have spent all their savings on a car without first having a house or an emergency fund.
New cars are worth only 40% of their purchase price after just five years. Paying a monthly rate…– plus interest – on something that loses value every day is not a good investment. It is not an investment at all.
I’ll be back with other money principles that schools should include in their early financial education curriculum.
Until then, please don’t forget:
Money, knowledge, and skills are valuable assets that can help our children throughout their lives. I can prepare them for success as financially responsible adults.
Education starts with you, as an example! Make a change in the long run for you and your family!