Like language, money is a symbolic system we use to communicate with each other. Kids’ exposure and sensitivity to language begins early, and the same may be true of money. The majority of opinions agree financial education ‘begins with children – the younger the better’. In the last post, we looked at what an important role financial education and family background has in influencing outcomes in life.
But where do – and where should – kids learn about money?
Long before children start school, they observe adults using money and buying things. VanFossen reports young children have the ability to understand economic principles, but their financial world views are often shaped by misunderstandings arising from personal experiences.
Learning to talk money at home… ‘do as I say, not as I do’
Based on the results of a Jump$tart survey showing most children learn financial literacy at home rather than school, Jewkes prompts parents to ask what kind of messages they might be sending their children.
Children are ‘continually apprenticing’, including hearing arguments or worries about money at home. In a T. Price Rowe survey, a third of children reported hearing their parents argue about money, and two-thirds said their parents worried about money.
The same survey found most parents are ‘extremely’ or ‘very’ very concerned about setting a good financial example.
And yet, or perhaps because of this concern, more than two-thirds admit to lying to their children, telling them they could not afford something (when they could) or sending a message of ‘do as I say, not as I do’. And 41% reported they sometimes avoid talking to their kids about money.
In spite of this, 80% of parents judged themselves as setting a good example. In Australia, too, Russell et al’s research on women showed only 26% had parents who talked to them about money management when they were children.
So if parents aren’t really talking to their kids about money at home – or in some cases, are not doing so honestly, or are sending mixed messages – what are they learning at school?
Studying finances at school… too little, too late?
While 91% of parents think it appropriate for children to learn about money at school, 80% are concerned schools aren’t doing enough. Children seem to agree. Most stated they learn more about money from their parents than school.
Most students’ experience of studying finances is one of too little, too late. We might learn to recognise coins in the early primary school years. But we aren’t really taught how to use money until high school.
Imagine if language was taught that way. If you studied the alphabet in kindergarten, and then didn’t do much with it until your second-to-last year of school. Suddenly, you’re expected to write essays?
It’s no wonder money feels like a ‘foreign language’ to many students.
Comments from a survey of 6,000 Canadian youth echo my own youthful experiences:
‘It would be the most helpful thing we have learned in school to date. Some stuff we will actually use in the real world. I think we definitely need to learn about money. The circumference of a circle? Literally, who cares? I’m not going to build circles, but everyone needs to know how to manage money or we will get poor and die’
‘I know there’s a Yoga class and a drama class in high school, make a money-manage class’
‘When children go to school, you prepare them for the future, and now the future is all about managing money WISELY. When schools don’t do this, they don’t prepare them for the real world, which does not enable them to succeed.’
While students showed a high level of interest in money management, and had reasonable expectations about what they would like to learn, ‘[youth] say they are not learning this at home or at school’.
In comparison with the language, children’s opportunities for exposure to financial input at home or school appear limited. And yet, as VanFossen points out, children play an increasing role in the U.S. economy. By 2011, the Harris Poll Youth Pulse estimated that American youth directly spend $211 billion a year. The amount they indirectly influence is many times larger.
Certainly, this group appears fluent in spending, and yet, concerns about financial literacy abound.
Both parents and schools, it seems, largely ignore the issue of money when it comes to teaching kids, perhaps because it’s taboo. But if we don’t talk to children about money, and model good money behaviours and attitudes, ‘the world of marketing and advertising will teach them‘.
Over the next few posts, we’ll look at the lessons toys and apps – and their advertising – might be teaching kids about money.
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Today’s featured image is of the carousel at Yongma Land, once a children’s paradise, now an abandoned amusement park owing to a financial downturn after the establishment of several much larger theme parks in Seoul. Thanks to an enterprising businessman, however, anyone can visit for 5,000 won (about $5) a day.
Where did you learn the most about money?
If you have kids, what are you trying to teach them? Let me know in the comments!