FEATURE
ADULTHOOD COMES WITH MANY CHALLENGES, WITH FISCAL ONES RIGHT THERE AT THE TOP OF THE LIST. SO HOW DO WE ENSURE OUR KIDS ARE FINANCIALLY SAVVY AND READY FOR THE BIG WIDE WORLD?
Parents of young children hear it all the time. “Can I have this?” It’s the catchcry of many a young child, and one that sometimes works and sometimes doesn’t depending on the suitability of the item in question, energy level of hit-up parent and cost of the chosen toy/ food/random implement. There it is. The dreaded ‘C’ word. And, whereas in the innocent world of our little cherished bambinos, the word does not exist (or if it does, does not have meaning), in the big wide scary grown-up world, it totally does. In fact, it not only exists, it pretty much goes to the heart of every household decision made, and while we all know that money doesn’t make you happy, a lack of it can certainly make you hapless. So, when is the moment that we pull our kids aside to lecture them on the value of material things and how to save/spend/invest wisely? And why is it so crucial to our kids’ chances of adult success that we do?
WHY FINANCIAL SKILLS ARE IMPORTANT “Financial literacy is the foundation to a successful and prosperous life,” explains Darren Eising, senior financial planner at Elemental Wealth Management (elementalwealth.com.au). “Just as with reading and writing, kids need to acquire a solid understanding of the fundamentals of finance, economics and investment in order to do well in life.”
“Financial literacy is defined as the ability to make informed judgements and to make effective decisions regarding the use and management of money (Coben, Dawes & Lee 2005),” adds leading educator Nadia McCallum who was recently awarded The Director General’s Award for Excellence in Service to Public Education and Training. “Given we live in a society where money provides a means to a home, health care, education and food, understanding how to manage money so that those needs are met is paramount.” “From earning money, to spending money, to borrowing to investing, and even to leaving a legacy, financial understanding is crucial,” adds ‘Australia’s Money Guru’ Michelle House. “It is important kids understand the difference between needs and wants, and the consequences of poor money management.”
WHY LEARNING YOUNG IS BENEFICIAL
“Children who learn about sound money management when they’re young have the opportunity to build habits – like saving and investing – that will stand them in good stead throughout their lives,” explains Lacey Filipich, founder and director of Money School, a financial education program for families (moneyschool.org.au). “These habits, if learned early, become second nature. As children move into adulthood, they then don’t stress about money as much because they are comfortable with it and have a solid plan about how to manage it.” “Financial awareness teaches kids about concepts such as delayed gratification, fair exchange (the opposite of 'entitlement', a common complaint of today's parents), value of hard work, and planning ahead,” concurs Dr Ash Nayate, clinical paediatric neuropsychologist. “The earlier a child can learn such concepts, the better. Ultimately, they become automatic.”
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SEPTEMBER / OCTOBER 2015 – Kids on the Coast
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