The world of money has changed drastically. For us, as parents, we could tell how much pocket money we had left just by jangling our pocket. Nowadays, pocket money has been transformed by the growth of contactless payments and ecommerce, with digital transactions making it all too easy for months of careful saving to be blown with the touch of a screen or tap of a card.
With a study by the University of West London showing that one in five Londoners below the age of 45 struggle to pay debts as a result of ‘tap and go’ payments, it is no wonder that many parents have concerns over their children’s finances in a cashless world. Whilst contactless payments have undoubtedly made spending more convenient for many, young people are becoming increasingly aware of the potential risks posed by the ease of digital transactions. As a result, over 5% of young people are switching back to cash to better control their spending.
Statistics like these shouldn’t scare children away from contactless payments entirely, but they should act as a wake-up call to ensure we are instilling in our children a firm understanding of the value of money and an appreciation that every tap adds up. Digital money is here to stay, and it is vital that children are integrated into this cashless society.
Lessons in financial literacy
Schools have played an important role in introducing children to the uses and functions of money since the inclusion of financial literacy on the national curriculum in 2014, with pupils in Key Stage 3 (ages 11-14) being taught about managing risk and the importance of budgeting, and children in Key Stage 4 (ages 15-16) learning about credit and debit, income and expenditure, savings and pensions. Exposing young people to the practical applications of financial literacy skills is essential if they are to become financially competent and confident adults.
Though effective in theory, the limited time, resources and staff available to teach even the syllabuses’ core subjects, often results in financial literacy classes being squeezed out of the day. Lesson content is also a cause for concern; the emphasis placed on cash and coins neglecting the fact that digital transactions dominate the world outside the school gates.
With financial literacy lessons taking place inconsistently, and placing an emphasis on the physical forms of money, there is a risk that children won’t leave school with the certified grasp of digital money required in today’s world of consumer credit and contactless payments.
Outside of the classroom
Whilst financial lessons at school are invaluable, seemingly unexciting topics like budgeting, saving and responsible spending are best taught through hands-on experiences at home. Exposing your child to the realities of their spending in a controlled, safe environment creates an opportunity for them to comprehend the value of their money, cultivating their financial awareness and ability to manage their money independently.
Does your child know the average cost of the weekly family shop, or how much is spent on their school supplies? Encouraging them to get stuck in with the family’s finances exposes them to the daily, practical uses of money – consider setting your child a task to help with the next supermarket trip, challenging them to buy items on the shopping list within a set budget, or to work out your monthly spend from old receipts, so they can independently assess the purchases that cost the most.
Of course, managing their own money is key in a child’s financial education. Whether it’s saving up to buy the latest video game, or the satisfaction of building up a nest egg, successfully and independently budgeting their pocket money can enable children to realise the benefits that come with financial planning. Letting children treat themselves once in a while, be it from their own savings or with a little parental help, will encourage them to develop positive financial behaviours and habits.
Money management is a vital life skill that can be introduced from an early age, whether in the classroom or at home. As parents, we can supplement existing financial literacy classes with hands-on lessons from home, and help shape our children into a financially competent and confident generation.
So how do we help a child become that independent person? As adults we need to find a balance between not overprotecting our children, or pressurising them to run before they can walk; our expectations need to be realistic, and we must bear in mind that children will always develop at very different rates. The ‘Early Years Development Matters’ takes us through a child’s Personal, Social and Emotional Development and exemplifies the ‘Characteristics of Effective Learning’ from birth to five years old; some good ideas and guidance may be found in the DfE document ‘What to expect, when?’ which has been developed for parents and carers. Furthermore, it is important that we encourage healthy risk taking, through climbing trees or doing something new, and the opportunity to embrace mistakes. In the words of Carol Dweck: “What we do not want is to encourage a fixed mind set where a child feels they are unable to do something for themselves so they will not try, we want a child who is comfortable trying for themselves and develops a growth mind set – they will experience the feeling that before success comes failure after failure. But that hard work and persistence works.”
In the first term, establish a good rapport with your child’s teacher and encourage their early reading and writing at home as advised by the school. Ask what happens in the book that they are reading, and help with extending their vocabulary to include words such as ‘first, second, finally.’ Don’t be scared to use the correct vocabulary –
the first year your child will be very attached to their first teacher and the school will prepare them for moving on to a new class, possibly with new pupils arriving too which can change the dynamic amongst the class. Over the first long summer break encourage more constructive play which requires your child to build things, take things apart and put them back together. Go on walks, build dens in the garden, start to ride a bike with stabilisers. Check table manners and correct use of cutlery and ‘please and thank yous.’ Use the days of the week more and continue with reading and basic writing.
Then come swimming lessons, possibly picking up an instrument for the first time, presenting in assembly and taking on minor roles of responsibility within the class (taking a message to the office or assisting with classroom chores). You will increasingly feel that you are not there for every milestone moment. This is important as your child will be forming a self-esteem based on their sense of their own achievements and by six we hope finding intrinsic motivation. They will be working out that effort impacts outcomes and they will be turning to peers to share their achievements. Winning the sack race, learning their times tables, holding the door open for a visitor, sharing their snack at break are all equally important.
Once a baby is born they face a number of milestones, for example smiling for the first time and rolling over. We are told when their first tooth will appear and when they will have health visitor appointments but little is said about how their eyes develop and what their vision is like. At birth babies do not see as well as older children or adults. Their eyes and visual system aren’t fully developed, significant improvement occurs during the first few months of life.
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