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Do Children Learn Enough about their Future Finances?

Posted by Murray LeClair on November 7, 2017 at 3:10 PM

Family looking out for home finances at the supermarket.jpegWhen it comes to school, many adults lament that they weren't taught enough about 'real life' skills when they were kids.

It is a common complaint: 'I can do trigonometry and know what happened to all of Henry VIII's wives, but I don't know how to do my taxes'.

For the next generation, it is possible to change this so they will feel better prepared when they leave school and enter adult society.

Already, we teach kids about things they will need to know when they grow up, and which also help them to understand the world around them while they are still growing. An example is technology, and many Australian schools try and use innovations in technology as early as possible to get children comfortable with the concepts of the web and mobile devices. However, one area that isn't taught as much as it perhaps would be beneficial to teach it, is finance.

Why Finance Is Important for the Next Generation

Finance, in the internet age, has become a lot more complex than it used to be. We now have things like cryptocurrency trading in Australia, which are fairly new concepts but one it is well worth understanding.

Add to that the fact that banking products like credit cards and mortgages have become more varied, and it makes sense that these should be something children understand when they are old enough to handle the ideas. So when they are older they don't have to be baffled by how much a mortgage they are offered will cost them or what the difference between a fixed or variable rate is in real terms.

Can Children Understand Finance Concepts?

Even very young children can be taught about money and how currencies work. They can be taught in very simple terms at first, but with ideas that translate to bigger ones. Learning, for instance, that other countries even have different currencies is something that most children can accept, having seen foreign TV shows where people talk about the prices of things.

More complicated topics like tax and lending can be introduced later. However it is best to align this with the maths they are studying at the time. When learning about percentages, for instance, learning how interest rates work can be a good idea. When learning about probability, there could be some discussion about the stock market.

Start Your Students Early

While some finance concepts will confuse anyone who doesn't have an economics degree, others are crucial life skills, and giving your pupils a good head start in understanding these will help every single one of them. 

While not all of them will go on to be engineers and need to know all about geometry, or to be scientists and need to know about cells, these are things we teach them all. Every one of them will need a bank account and to pay taxes in their adult lives, so helping them understand these things by introducing them early makes for a better equipped group of kids.

While how it is taught and how much will differ, it is really important that finance is something that educators are starting to see as important at all stages of school life, helping give some real life skills to the students.

You may find this Kids Guide to Saving - Interactive Workbook useful.

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