Money Management for Children – How young is too young?
Guest post by Elaine Roberts
The British Government recently announced that it will be incorporating compulsory money management into the National Curriculum. This means that children as young as 5 will be learning about personal finances. While many of us can see the benefit of teaching children how to manage their money from a young age, the policy has come under some fierce scrutiny from groups who claim weâ€™re taking childhood innocence from these school pupils.
Nonsense, if you ask me.
The developed world has a massive consumer debt problem and itâ€™s largely because of poor debt management by adults. But is it really surprising. We go to school and itâ€™s deemed a failure by the school system if we are unable to read and write properly. Why? Because these are essential skills for getting on in life. Yet up until now there has been no compulsory money management education. Instead, young people leave at 18 with no prior experience of handling their finances and are thrust into a society where credit is available all too easily. And then we have the audacity to wonder why young people struggle to juggle their money! Handling finances is an absolutely essential skill and I donâ€™t believe that any age is too young if the lessons are made fun.
Take my daughter, for example, who recently turned four. She knows that certain small chores, like helping me to clean up the living room and helping me with tidying up earn her £1. She can look in a catalogue and see how much things cost and find something she would like and ascertain how many times she should help me to be able to treat herself. If, in the meantime, something else comes up she wants, she knows she has to weigh what is most important â€“ the larger treat she is saving up for (which will be longer in the process if she buys a small thing in the meantime) or the smaller thing now. She weighs this effectively and makes a decision knowing what the consequences will be. This is money management â€“ knowing that you canâ€™t buy everything and being able to work out what the priority is.
So with money management for children, how young is too young? Well, if youâ€™re talking spreadsheets, accounts and complex financial data, then yes, 5 is far too young. But for basic concept teaching, made fun, itâ€™s never too early. And perhaps a financially educated generation of young people will go some way to tackling the massive debt problem facing consumers.
What about you? Do you teach your children about money? At what age?