The last in a series of five essays which have taken an in-depth look at the Green Paper: Every Child Matters: Change for Children 2003.
This is an interesting concept – a desired outcome for very young children is to achieve economic wellbeing. It is obvious to me, that as children get older and reach school age, their curriculum should automatically include subject matter and opportunities for every one of them to begin to develop an understanding of the importance of money and how it can be used to improve lifestyles, as payment for work done, as a way of getting things that are just out of reach to mention just a few. Schools quite rightly develop vocational as well as academic training for all children so that the choices they make have a solid foundation.
Research in recent years identifies a growing trend. Small children do not necessarily have the knowledge and skills to make full use of money and finances. There is concern that in an age when cash is becoming less and less of a commodity, children will grow into adults who do not fully appreciate all of the aspects that money has.
For example, in 2000 the Financial Services Authority produced findings from research which was commissioned by them and undertaken by the Centre for Research in Social Policy (CRSP), Loughborough University has identified huge gaps between the financial knowledge and experiences of children from high and low income households aged between six and eleven years.
The findings show that:
- children from low-income households have little knowledge of the role of banks and building societies beyond the fact that they are ”safe” places to keep money. Visits to these institutions rarely take place, with many of them living in areas where the local bank, building society or cash machine has closed down;
- children from higher-income households are knowledgeable about the services offered by the banks and building societies and why people have accounts with them;
- children from low-income households see their parents operating an almost exclusive cash-based lifestyle. They are aware of the careful budgeting strategies employed by their parents who allocate small amounts of cash to jars, tins or purses to pay particular bills. They also understand the dire consequences of running out of money as illustrated by one seven year old, "There’s the gas card from the shop. You buy that and get a gas card and put it in this little slot, and if you don’t, you can’t watch television and can’t have any food ’cause the cooker is off";
- children from higher-income households understand a variety of methods for paying for things (cheques and credit cards) but have very few budgeting skills and limited knowledge of how household and other bills are paid;
- only 59 per cent of children from families on Income Support had formal savings accounts compared with 83 per cent of children in families not on Income Support.
We also see evidence of this in the number of people, mainly young, who are in enormous debt with their credit card companies because they didn’t understand the danger of paying back the minimum payments. They have seen their debts soar rather than come down due to this and other factors.
Attitudes need to change
When I visit group day care settings for young children or go to nursery classes, I rarely if ever see the children playing with pretend or real money. I hear lots of valid reasons for this:
- “The real money is so dirty, it is unhygienic.”
- “The coins are too small and a child may swallow them and choke.”
- “Children don’t want to play with money these days; it is boring.”
- “Why would we make children play with money? They don’t need to know anything about it until they are much older.”
- “We will be changing to Euros soon, so why confuse the children?”
Money, money, money
Money is important. Children do need to feel it, see it, play with it, smell it and when adult backs are turned, bite it. It is a wonderful tool for sorting and categorising. It demonstrates anomalies; for example, the smaller, lighter coins are worth more than some of the larger, heavier coins. Money does not have to be circular, nor does it have to be thick.
As children reach the age of four, it is quite a worthwhile exercise to offer them pocket money in return for a job they can do. I am not talking about a full spring clean of their bedroom, but any child can certainly take their dirty clothes to the laundry basket, or put their shoes in their wardrobe, or help to brush the dog. The link between work and money cannot be broached soon enough. There is debate about whether children should always see money as a reward for something they do or whether it should initially be seen as a gift. I am of the opinion that the more a child understands that the value of money is what it means to them or what it can buy for them, the better.
Understanding change is also an important concept that is much neglected. If we pay for something, we should expect to be given change if we did not give the correct amount. If we then choose to pay an additional amount to demonstrate our pleasure or gratitude, it is our choice. Children who are encouraged to think in this way are very keen to keep what is theirs and to have the pleasure of giving extra to what they consider to be deserving causes! They may not always reward hard work, but it does make them value their own finances.
Rewards for hard work
The parents of small children can receive financial support from state benefits and grants, and whilst I encourage all families to claim what is theirs by right, I understand the reluctance of some parents to complete yet another pile of forms where one’s financial and other status is becoming less and less confidential. Whatever they can get in order to support their children through their early years and in to school, does not directly impact on the child, nor should it.
The impact on the child begins when the parent has to say “No” to requests for shoes, games, toys, ices. The lesson that money doesn’t grow on trees should begin early. It is worth a few tears to get a child to the level of understanding where they can say, “I’m saving up my money so that I can buy something of my own.”
I have been waiting over thirty years and I still haven’t heard it! I hope you have better luck than me.