Who should teach our children about money - parents or teachers?

Should we be teaching children about money in school? Health and fitness subjects are already part of the Australian school curriculum however important life skills like managing personal finances are being neglected. They are part of our school curriculum but only a small part.

In a recent survey by American bank TCF almost half of teens confessed they feel clueless about managing money. 90 per cent sad they aren’t learning what they need to know and a quarter say once they graduate high school, they still have no idea how to manage their personal finances.

In the UK lawmakers have voted to make financial education mandatory in 2014. Money skills will be taught in primary school during maths and money lessons will also be built into English and science classes.

Should Australia follow suit? We have high personal debt levels and majority of that is on credit cards. Finances continue to be one of the top sources of stress in relationships and despite low interest rates, there’s been no decrease in the number of Australians defaulting on their mortgages.

Clearly something is going wrong. Are we leaving money lessons too late?

Then there’s the question of whose job it is to teach children about money – teachers or parents. Some teachers say it’s parents job to teach such skills.

My view is, why can’t it be both?

Kate Mills of the Professional Mums Network says it’s crucial children are taught about money in schools.

“Financial decisions have become so much harder for the younger generation who are bombarded with consumer messages from the moment that they can see! This makes it vitally important that the school and parents work in partnership to give kids the tools that they need to manage money.”

Instead of parents and teachers trying to divide up responsibilities, we need to think about financial education as a partnership. We need to build in money lessons from primary school and then make it more comprehensive in high school. We spend majority of our time educating children so they can get they fulfill their career ambitions and then forget to teach them how to effectively manage the money they make from that career.

Do your children understand that when they ask us to buy something, the money has to come from somewhere? Are they able to delay gratification and save up for things?

Do teenagers understand that receiving a credit card approval isn’t a compliment?

When I left school I was completely clueless. My first pay packet from my after school job contained $68. I was so excited when I received it that I ran home laughing. I then went to the shops and spent it all. I had never been taught that the real power came with keeping as much of that money as possible, not in the spending of it. But spending is ingrained in our culture.

How many times have you watched a TV show or movie where the cool characters ‘max out’ their credit cards?

I remember watching Beverly Hills 90210. An episode showed Kelly and Brenda at a clothing store together. Kelly was asked at the check out ‘paper or plastic’ and Brenda looked on in envy at how easily Kelly could purchase whatever she wanted. Meantime Brenda had alter some clothes she already owned to have something to wear.

The lesson I should have learned was that even if you don’t have money, you can still think of something by being resourceful but the lesson I took away was that credit cards were cool.

Sex and the City just extended that belief. There were constant references to Carrie’s credit card debt and lack of money but she still spent every cent on fashion without saving for a rainy day.

Kate Mills agrees that plastic is one of our biggest financial challenges.

“We live in a cashless economy so money has become an abstract concept where children don’t see where it comes from or where it goes. The biggest tip I give to parents is to work in cash when you do the shopping with your children. Go to the ATM, take out what you need for that week’s shopping and let the child hand it over and manage the change. What’s left over each week could be used as their savings so that they seen the benefits of making smart buying choices.”

Our children are surrounded by unhealthy money messages so to combat that, we need to tackle it from more than one angle. Parents can set a good example with money, have conversations with their children about managing money and teach them skills by giving them an allowance. Schools can take it even further by embedding lessons in multiple subjects where students discuss scenarios with their teachers and most importantly, their peers.

When it comes to parents role in teaching kids about money, Kate suggests we focus on the following lessons for each age group:

As toddler – that resources are finite (money doesn’t grow on trees);
As primary school students – that money comes from working/having a job. Setting goals with regards to saving;
As teenagers – how to budget, how to save and the basic principles of investing.
Find out more at professionalmums.net and on their Facebook page.

Who do you think should teach our children about money?

Kate Mills and I discussed this very topic this morning on Wake Up on Network Ten. Watch our conversation here: