Tag: Financial Literacy

Where should kids learn about money?

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?

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Are the wealthy rich because they’re smart?

Are rich people rich because they’re smart?

Or to put it another way, are you not rich because you’re not smart enough?

According to a study conducted by the Joseph Rowntree Foundation, 69% of people believe ‘there is enough opportunity for virtually everyone to get on in their life if they really want to’. In other words, if you’re poor, it’s your fault.

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How can experts influence our money decisions?

Our ways of speaking about money, and using money, are intimately tied. So can the language of financial experts influence our money decisions?

Linguistic Relativity, also known as the Sapir-Whorf hypothesis, states that the structure of a language influences its speakers’ world-view.

The philosopher (of mathematics, mind and language) Ludwig Wittgenstein’s theory of language as the means by which people both picture reality and reason famously concludes ‘Whereof one cannot speak, thereof one must be silent’.

In other words, in order to be able to talk about money, and make effective decisions about money (key aspects of financial literacy), we need to understand the language of money.

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How do our financial tongues differ?

While children generally learn the variety of language their parents speak, seemingly ‘automatically’, this does not mean they have access to all of the dialects of that language equally. Furthermore, different dialects have different uses and are valued differently in different contexts.

I grew up speaking a more rural variety of English, and acquired a more ‘standard’ variety later in life.
Most children grow up speaking the familiar, informal language of the household. They learn the more formal registers considered suitable for education and the workplace.

Like stigmatised language varieties, some varieties of financial literacy – beliefs and behaviours connected with money acquired from childhood – are less valued in society. That is, they are associated with less symbolic and social value. They may lack prestige, and possibly lead to social exclusion.

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What is financial literacy?

In 2009 and 2011, Americans and Australians respectively were asked five ‘basic’ financial literacy questions. Only 43.8% of the Americans and 36.5% of the Australians managed to get all five correct. And it’s not only ‘average’ Americans and Australians – a 2002 survey of 530 online investors, who we might expect to be more financially savvy also found that half could not pass a simple financial literacy test.

But what is financial literacy?

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