Financial Education: What Parents Need To Know
Your child is an A-grade student, they have listened admirably in class, passed all their exams and now they are off to take the world by storm… but one bit of their education appears to be missing... their financial education. Studies have shown that young adults are not financially prepared when they leave school.
Many of our children are leaving school unprepared
Financial education has never taken centre stage at school, and yet every single one of our children will be dealing with money on a daily basis all through their lives… you can’t even say that about handwriting anymore!
A 2013 study by behaviour experts at Cambridge University highlighted that money habits are actually set by the age of 7, so children are more than capable of learning these key skills from a young age.
“Shh...don’t talk about money, the kids are here.”
Money can be a taboo subject in many households. Sometimes as parents, we want to shield our children from financial worry so refrain from talking about it with them. But, if we shield them, how will they ever learn? It shouldn't just be an adult topic for conversation.
Our kids need to understand how money works in the real world, to see that it plays a role in our social and material lives and that it affects ALL areas of our lives. We should be talking about mortgages and rent, bills, and the costs of living. They need to be aware that money does not grow on trees, or magically appear through an ATM hole in the wall. They need to know about budgeting, saving, the difference between wants and needs, and realise that different things cost different amounts of money.
It is essential that children get the chance to experiment with money, to experience it in a real capacity, and learn through making their own mistakes - in a fun and safe environment. Giving them the opportunity to “fail” when they are younger can save them years of anxiety later in life. Only through awareness and these real-life experiences, will they be able to enter the “real world”, confident in how to manage money.
Top tips on how parents can help their children learn financial skills
- Give children the chance to earn pocket money for doing household chores. It doesn’t have to be very much, but it introduces children to the concept of a salary
- Provide a menu of jobs that go above and beyond the pocket money chores, incentivizing your kids to earn extra money
- Play board games like Monopoly and Game of Life with your children. There are many life-like lessons involved including budgeting, buying, selling, and saving.
- Talk to your children whenever you buy or sell something, compare prices, and ask for their opinions and input, to help them feel included and start thinking for themselves.
- Have an impulse-buy jar at home. If you find something you would like to buy but decide not to, put the unspent money t in that jar, and watch it add up. Decide, as a family, what you would like to do with this money when the jar is full. Save it or use it on a long term goal?
- Set your child up with their own bank account. Take them to the bank and get them to think of 3 questions that they could ask the bank manager while they are there, to learn more about what they are doing.
- Have a piggy bank at home for loose change. Show them that small amounts soon add up to larger amounts and that they are worth saving. Then see what you can buy when the piggy bank is full.
- Play ‘Guess how much’ with your child. Choose an item or service, make a guess as to how much it costs, and then search the price online to find out whose guess was closest.
- Sign your children up to QniQr, the first online marketplace just for children. They can sell pre-loved toys, save money, buy other second-hand items for a fraction of the new price, and learn about money while they are doing it.
QniQr is the first online marketplace exclusively designed for kids and teens, by parents and teachers to help educate them about money. Children are not playing virtual money games here; they are experiencing spending and making money in a real environment, where they can make mistakes and build valuable financial skills. There are fun animated tutorials to help guide them along the way, teaching them to get the best out of the website, and become savvy young business people. They have the chance to become entrepreneurs, to become more mindful of what they need and want, and to realise the value of things that otherwise they might take for granted.
We encourage parents to use QniQr to start important money-related conversations with their children. All the topics below are things that you can talk through with them while they are using the QniQr platform.
- Could vs should buy
- How to budget for something
- Delayed gratification
- How much does it cost?
- Can you buy it cheaper elsewhere?
- What does it cost new vs second hand?
- Do you have enough money to buy it?
- Are you sure you want to spend the money now?
- Would you rather put it on your birthday list?
- Future savings