KT for Good: Is your child smart with money?

KT for Good, Money, finance, UAE, child, savings

Dubai - 'Financial literacy is as important as any other subject children study at school.'

On Sunday, we ran a poll on Khaleej Times website and social media platforms to know what parents think about financial literacy for kids. Almost 80 per cent of the readers who participated think money habits should be taught to children from an early age. Yet, almost half (45 per cent to be precise) do not talk to their children about money matters.

Meanwhile, most schools in the UAE (in fact globally) do not offer structured lessons on financial literacy. So how do we raise money-smart kids when a lot of parents are afraid to talk about money and schools do not offer guided lessons? How do we ensure that our children do not make the same mistakes as we have with our splurges on credit cards, or over-leveraging through loans? Well, as things stand the onus squarely is on the parents and caregivers and conversations must start at home.

"Financial literacy is as important as any other subject children study at school. In fact, I think it is the most important one. It is a topic that they will be tested on every single day of their life. You cannot say the same thing about history or math or any other subject for that matter," says Marilyn Pinto, mother of two, a passionate advocate of financial literacy, and founder of Kids Finance Initiative.

"These are critical skills and it is not something that you can teach children in an hour long talk or so. It should be an ongoing conversation and parents should take the first step and start at home," she adds.

"Children should be consistently advised by parents to spare money for charity, too. It will be a stepping stone for future benefits to the family and society," says Mohamed Basha, a KT reader.

But when is it appropriate to start? Experts suggest as soon as they start asking for goodies, which could be at the age of two. Adult money habits, according to a study by the University of Cambridge, are typically set by the age of seven. By then, most children typically have grasped qualities like how to recognise the value of money. They become capable of planning ahead, understand the relevance and importance of delaying a decision until later.

If we want our children to do well in life, the earlier we can start talking about money, discuss our spending decisions, and help them learn to delay gratification, the better it is.
Talk, talk, talk
Let your failures be known, there is no shame in showing our kids how vulnerable our life has been to some financial decisions, which might have seemed easy to handle at first but left a major impact on our life or that of someone we know. Our life stories, our experiences are invaluable learning lessons for them. Just choose the right narrative and build a story that interests them and also conveys an important message to them.

Don't wait for the schools to teach kids about financial literacy, take the first step at home, talk to your kids.

In an age of when consumerism is on steroids through online and off line means, the importance of a good grounding in money management is more relevant than ever.

suneeti@khaleejtimes.com