Are we witnessing the death of the piggy bank? Even before Covid there was a surge in children’s pocket money being paid by topping up prepaid cards, the Internet or mobile accounts rather than paying out in notes or coins. But has one of the consequences of the pandemic – an increasingly cashless society – led to a worsening of our children’s understanding of basic finances?
It would certainly seem so. New research commissioned by us at WealthiHer clearly demonstrates our children are in danger of no longer understanding the value of money as cash disappears from their pockets.
Our research showed that the number of over 11-year olds receiving an allowance paid into a bank account has risen by 20% in the past six months, with the weekly handout in the form of cash becoming rarer than ever. Relatives sending money for birthdays, Christmas and special events by bank transfer rather than sending notes is also increasing. And eight out of ten people believe schools must do more to help our youngsters get a better handle on money in these changing times, with many not able to identify coins or notes – something they can ordinarily do from the age of six.
Which is why we at WealthiHer are calling on the government to review the way financial literacy is taught in schools.
Whilst parents still believing they have a traditional role to play in teaching their children about finances, one in five don’t feel confident doing so. Three in four (76%) say schools are failing to treat personal finance as a proper subject.
Once upon a time you could tell how much money you had by the jingle in your pocket. Now it is much more difficult for children to budget, especially when parents simply top up a payment card. It’s very easy for youngsters to buy things with the flash of a card or make a purchase over the Internet with a couple of clicks without realising how much they are spending or how much is left in their accounts.
The days when you added coins to your piggy bank and learned by regularly counting out how much money you had and saw the amount build up are, it appears, over and this makes it much more difficult for parents to explain how money is earned and used. While youngsters traditionally learned about money by seeing how their parents handled cash, the way we all interact with money has changed which is making it more difficult for parents to show the benefits and pitfalls of using money.
At WealthiHer, we want to see a specific personal finance curriculum introduced into lessons and taught as early as primary school, which would stay with children for the rest of their lives rather than the haphazard way it is currently taught by integrating it into other subjects. Children as young as three can understand the basic principles of money and by seven, many money habits are already formed.
The Covid epidemic has forever changed the way we handle money and children need to be educated in understanding money at a young as possible age. Seeing a figure on a phone app is not the same as being taught with a few pennies.
The business community can play a role in helping to teach young people about money, working with parents, schools and children themselves to get them involved in financial decision-making, trade-offs about money and budgeting. After all, the more we encourage financial knowledge at an early age, the more financially savvy and commercially-minded our young people will be as adults in the future.
So what can you do as a business leader to help our children become more money aware?
by Tamara Gillan CEO of The WealthiHer Network