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Rash With Cash

A weekend at the mall for a teenager = Dh50 on food, Dh400 for a pair of branded sneakers, Dh300 on that chic outfit or a pair of sunglasses and there’s still some cash left to splurge on a new mobile phone that has hit the market.

Most children think money ‘does’ grow on trees! Experts call it the “magical thinking” of children, where money appears from parents’ wallets without a trace of its origin.

Spending habits of youngsters underscore the lack of financial literacy among the youth in the country.

“Financial literacy among schoolchildren in the UAE is poor in comparison to other western countries,” said Karim Seifeddine, Public Affairs Head — Middle East, Citibank. “They do not have an understanding of the basic terms and concepts of banking, the economy and personal finance trends,” he said.

Experts state that parents often give in to the monetary demands of their children and do not instill in them the concepts of earning and saving at an early stage.

Max Wright, a 13-year-old student in Dubai, is never denied the latest gadget and believes it to be his right, to buy what he ‘wants’. “I do not see a problem in spending all my allowance money on PSP games; it’s why I’m given that amount in the first place,” he said.

“I will save up when I start earning for myself.”

A recent poll of 100 teachers in the UAE found that a majority of the professionals (92 per cent) thought financial understanding was important for young people and believed it must be compulsory at the school level.

The survey by VISA saw 73 per cent of teachers admitting that schools did not currently teach basic money skills as part of the curriculum.

Financial education at many schools is confined to core textbooks and courses that teach definitions rather than application.

“In the present situation, there is a big disconnect between the level of understanding of the traditional material in schools and the true economic understanding,” Seifeddine said.

Citibank runs a global programme called JA Banks in Action that exposes students to financial education and banking basics. The initiative is backed by Junior Achievement Worldwide (JA), a not-for-profit organisation that imparts financial literacy, workforce readiness and entrepreneurship to develop the future workforce.

In the country, INJAZ-UAE, a member of JA and established last year, started programmes in schools to elevate the knowledge of students in the aspects of personal finance.

It has partnered with financial institutions in the country to create financial literacy modules that are introduced over several weeks to high school students. The JA More Than Money programme was piloted by INJAZ last year with 948 students from grades 6 and 7. The programme taught students ways to earn and consciously spend, share and save money.

The organisation launched eight programmes that educated 2,800 students through 249 corporate volunteers in 2009 and is targeting another 4,500 students by the end of 2010.

Shaikh Khaled bin Zayed Al Nahyan, Chairman of INJAZ — UAE, said the programmes address the changing needs of students in the UAE at an age when financial literacy is not being offered. “It will have a positive impact on their behaviour as future professionals and conscious consumers,” he said.

It’s never too early to make children money wise, says Seifeddine. “They must be motivated to save. Make money a part of their incentive to buy things they want.”

Financial education can be explained through relevance to real-life situations and games. “Appreciating money is very important and something that needs to be respected as resources,” said Seifeddine. “There needs to be an increase in the responsibility towards making informed financial decisions at a young age to change the common spendthrift attitude.”

Teenager Safia Tariq recently began thinking about ways to save the allowance she gets. However, it took the grade 11 student of Maria Al Qubtiya School in Dubai a while to become money-wise, she says. “Watching my trendy peers and noticing their latest purchases always tempted me to follow,” she said.

“I would carelessly invest in things that I would not necessarily need but it made me look good.

“But now, with an increased awareness around and the eye-opener (that was the) economic crisis, I have begun re-evaluating my spending and try to save up for something I really need.”

At home, children can start with board games like monopoly where paper money can be used to teach currency. Parents can also visit the bank with their kids and include teenagers in financial discussions to enhance their understanding.

Another avenue to teach young minds about handling money is Online Trading. Tareq Abu Hantash, manager of the Online Trading Academy at Dubai Knowledge Village, said a handful of high school students are taking courses in stock trading. “A majority of parents I have met tell me their children are addicted to games such as Poker on Facebook,” Hantash said.

“Instead of wasting time on such silly games, it would be better if children can work to understand risk management through online trading.”

According to Hantash, stock market simulation games should also be incorporated in course work of high school students. The youngest student at the academy was a 13 year old who, Hantash said, now assists his father in making the ‘extra buck on the side’.

RAISING MONEY-SAVVY KIDS

υ teach kids money choices — save, spend, donate and invest to help them learn how to control spending impulses

υ teach them the difference between ‘needs’ and ‘wants’

υ set goals and reasons to save to make the investment in things worthwhile and deserving

υ give children an allowance and let them take personal responsibility for money decisions and expenses. The child will learn how to stick to a budget

υ do not hide family money matters from kids

υ let the child mirror parents’ best practices of handling money

SMALL STORY

Around 200 students of Middlesex University Dubai recently met potential local and international employers for internships and employment prospects.

Leading names, including Standard Chartered Bank, Ernst & Young, PriceWaterhouse Coopers, and Jotun UAE, were present to discuss the future careers of the final-year students of Dubai campus of the London-based university.

Stepping Stones Center for Autistic Spectrum Disorders and the Child Early Intervention Medical Center were also present to offer internships to second-year Psychology majors.

“Industry cooperation and involvement are among our key strategic objectives,” said Professor Raed Awamleh, Director of the university

“Our mission as a university is to prepare our graduates to meet challenges and opportunities with confidence and lifelong learning skills.”

The Dubai campus of Middlesex University London, which opened in January 2005, has more than 1,300 students of 83 nationalities and offers 29 undergraduate and postgraduate programmes in a wide variety of subject areas.

afshan@khaleejtimes.com