Money management is one of the many crucial life
lessons that parents must pass on to their children. As Wim Mijs, Chief
Executive of the European Banking Federation, said last year, no one can replace the
parents as the main guide for children learning how to deal with money. With this
in mind, let’s assume the important role of families in teaching a skill that
will be vital at all stages of life.
Despite the general tendency of leaving the
responsibility of education to teachers and institutions, many studies [ACG1] have shown that the role of parents should not be overlooked in
equipping children for such an important life commitment. The positive impact
of providing a nurturing learning environment for children is invaluable in every
aspect of life, and financial education is no exception. However, some adults find
finances complicated enough to understand themselves, let alone to teach
children their intricacies. But there is a middle way: allowing children to become
familiar with conversations about money and helping them acquire the
terminology that they will soon need to put into practice. Children who receive
a sound basis from their parents stand a good chance of growing up being better
informed and more careful with their budgets than their peers.
Nelly Guet, from Alerteducation, published an article on the
magazine of the French Federation of Parents (APEL): L'éducation financière est une aide au choix, pour la
vie (Financial education is a
help to the choice, for life). In her efforts to include financial education in
schools, she argues financial literacy is the chance for students to understand
the world they live in and to become more autonomous when taking lifetime
decisions. At the same time, financial education contributes to a more equal
society: “There is a link between
financial literacy and family history: those who have these skills come in a
huge proportion of highly educated families with sophisticated means in terms
of finance. To ensure equal opportunities, it is important to provide financial
education to those who would not have access otherwise”, she said.
In 2013, the Money Advice Service in the UK urged parents not
to "underestimate the effect their own good (and bad) money habits will
have on their children”. According to a study conducted by researchers at University of
Cambridge, most young children grasp all the main aspects of how money works and children's financial habits are formed by the age
of seven. Caroline Rookes, chief executive of the Money Advice Service, said:
“This study really demonstrates the power of parental influences, and
illustrates how much of what you learn and absorb when you are young, both
consciously and subconsciously, affects the choices you make throughout the
rest of your life."
We should not leave schools alone to teach children
everything they need to know about life, as parents play a key role in this
essential task. This should be a joint effort to ensure that children absorb the
concepts and transform them into habits. For financial education, one thing is certain:
no one can afford to ignore money management, so we’d better be ready for it!
The article was originally posted at www.europeanmoneyweek.eu .
[ACG1]Wim Mijs has mentioned a couple of times a
research that shows that people who grow up where the parents have told them
about money are considerably better informed and more careful with their budget
than other children. Any chance of having a link to this research?
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