The importance of children’s financial education cannot be overstated. As the world becomes increasingly complex and costly, it’s vital that children start learning financial literacy early—preferably during primary school. This article explores why this education should begin at a young age, the key financial lessons that can benefit children, and how schools and governments can contribute to effective implementation.
Early financial education prepares children to manage money and teaches them healthy financial habits. From basic budgeting to understanding debt and investments, primary school is an ideal setting to introduce these critical lessons.
According to the Money and Pensions Service (MaPS), “Financial education encompasses activities that help children develop the knowledge, skills, and attitudes needed to manage money effectively, make informed financial decisions, and accomplish their goals.” This education covers a broad spectrum of topics suited to children’s developmental stages, including recognizing currency, basic budgeting, saving, and understanding the connection between money and work.
Why Financial Education Should Start in Primary Schools
Recent years have highlighted the necessity of integrating fundamental financial education into school curricula, ideally starting from primary education. According to Herminone McKee, chief financial officer at SumUp, “Financial literacy is crucial for the next generation. Despite their digital fluency, studies reveal a worrying lack of financial understanding among ‘Gen Z’.” It is essential for educators and parents to utilize technology and innovative teaching methods that resonate with today’s youth.
“Understanding financial principles such as interest rates and the importance of budgeting is crucial for making sound financial decisions,” says McKee. Learning the value of pocket money can set the groundwork for important future financial decisions, like investing or saving for a property.
Michael König, academic director at Vienna’s WU Executive Academy, emphasizes that children should naturally engage with personal finance fundamentals early on. Concepts such as interest rates, inflation, and the time value of money should be introduced in a playful, stress-free manner.
Professor Carmela Aprea leads the Mannheim Institute for Financial Education (MIFE) and advocates for a fun, pressure-free approach. “Children can explore their desires, the significance of those desires, and how to achieve them while understanding how their families manage money,” she states.
Financial conversations can begin informally at home. Erica Sandberg, a consumer finance expert, recommends discussing the cost of items children are interested in, which teaches them basic economic concepts in everyday situations.
Education Technology: Bridging the Financial Literacy Gap
Lucy Wayman, a math consultant with the British company 21C, discusses how children’s attitudes toward money form at a young age. “These early perceptions will influence their lifelong financial outlook,” she notes. In our rapidly digitizing world, equipping children with financial awareness is more vital than ever due to the rise of digital financial crime.
A solid understanding of mathematics is integral to financial literacy. The capacity to estimate, calculate, and compare quickly not only reduces the likelihood of being deceived but also provides a strong basis for making informed financial decisions.
Essential Financial Lessons for Young Learners
Introducing age-appropriate financial concepts in primary school is crucial. Aaron Cirksena, CEO of MDRN Capital, emphasizes that children should grasp the fundamentals of money. Simple budgeting can help them categorize needs, wants, and savings effectively.
“Instilling a positive mindset about money at a young age is crucial,” advises Sandberg. It’s essential that children feel empowered in making financial decisions, from earning to saving and spending.
Erika Kullberg, founder of Erika.com, stresses the importance of understanding credit. As young adults can qualify for credit cards at 18, having a firm grasp on responsible credit use becomes critical.
Joe DiSanto, CEO of Play Louder, shares his hands-on approach with his son. By linking chores to earning opportunities, he teaches the connection between work and reward. He also introduces the concept of investing, illustrating that money can grow over time, not just be spent immediately.
König adds that children should learn to appreciate the risks involved in financial decisions, including spending, saving, and investing their allowance, providing them with a foundational understanding of personal finance.
Supporting Financial Education: Roles of Schools and Governments
Schools and governments can promote financial literacy by providing incentives for saving, such as accessible savings accounts for children. Integrating financial education into subjects like math or life skills and training teachers to deliver this knowledge confidently are also essential.
McKee suggests leveraging existing financial education apps designed for various age groups to enhance learning both at school and home. “Gaming elements can make budgeting and saving feel less intimidating and more engaging,” she remarks.
Aprea encourages schools to invest in quality materials and comprehensive teacher education, while also involving parents in financial discussions that can reinforce these lessons at home. An interdisciplinary approach that connects finance with other important life skills can enhance student engagement.
Challenges in Implementing Financial Education
While financial education is gaining traction in curriculums, several challenges remain. Aprea points out that creating effective financial materials and training teachers can be time-consuming and costly. Financial education often competes with other critical subjects, necessitating innovative connections between them.
Additionally, Cirksena highlights a lack of standardized curriculum and teacher preparedness, which could create inconsistencies in financial education across schools. Socioeconomic factors also play a significant role in how financial concepts resonate with students from diverse backgrounds.
Change can be slow on a macro level, cautions Sandberg. Educators shouldn’t hesitate to proactively introduce financial concepts in engaging ways, even if comprehensive mandates aren’t yet in place.
Photo credit & article inspired by: Euronews
