With personal finance education being introduced to the school curriculum from this autumn NOW: Pensions, conducted an experiment by quizzing 14 children aged between 6 and 9 on money matters. The results were enlightening, amusing and sometimes touching.
The films which can be viewed at www.nowpensions.com/big-questions-for-little-people covered topics as wide ranging as: where does money come from; what do you think you’ll be doing when you’re 68; what does “pension” mean; and what would you do with a million pounds?
While most of the children had no idea what a pension was, Libby, aged 8 ventured that it was “a long pencil” while Frankie, also aged 8, thought it was “something to do with science”.
When it came to where money comes from, Harley aged 7 was confident that it came from “my Dad’s wallet” but Sammy aged 6 said that “when you work harder and harder and harder you get more money and the money goes into the bank.”
Looking to the future, most of the children thought that when they got to 68 they’d be “taking it easy”. Rose aged 7 said she thinks she’ll be “reading newspapers all the time”. Sammy aged 6 said he expects to be “doing things that grandpas do – sitting down watching TV all day.” Iona aged 8 was more philosophical stating “I think I’ll be working when I’m 68. I just don’t think it’s very good to sit down in front of the TV and spend the rest of your life like that. I think you need to actually get up and do something.”
When it comes to saving, Frankie aged 8 offered a valuable insight – she said: “these days you don’t have things for free a lot” while Sammy aged 6 said “if I don’t save my pocket money, I won’t be able to do the things I want to do.”
Given a million pounds, some of the children had rather modest aspirations – George aged 6 said he would buy his friend Archie a motorbike, while Archie said he’d buy George a hockey stick. Libby aged 8 said she’d buy “an amazing house, a really amazing house, a really really amazing house” but give “five pounds to charity” while Harley aged 7 said she’d play it safe and keep it “under my bed with a lock on it so no one can get it.”
Amy Mankelow, Communications Manager at NOW: Pensions commented: “Many of the children showed wisdom beyond their years with some really inspiring and touching thoughts on money matters and more. Saving needn’t be complicated and although the term pension proved baffling, most understood the importance of saving and were proud of their piggy bank! Hopefully with the introduction of personal finance education in schools, generations of young people will now be able to gain the confidence and skills they need to manage their personal finances.”
Five ways to teach your child about money from financial education charity pfeg (Personal Finance Education Group)
1) Talk to your children about money!
It sounds simple, but this is the most effective way to help your children understand personal finance. Explain how you arrive at financial decisions, what’s in your budget and how different aspects of dealing with money make you feel.
2) Teach them where money comes from
We’re an increasingly cashless society, and thanks to the invention of cashback it’s easy for children to assume that the supermarket is the source of all of your funds. Showing your child your payslip and explaining what you had to do to find employment are good ways of building financial understanding.
3) Set savings challenges
If you give your child pocket money, talk to them about setting a savings target and encourage them to adopt good habits early. This is a good opportunity to introduce ideas around keeping your money safe and planning for the future.
4) Explain the difference between needs and wants
Contrast examples of goods they need every day, such as food and clothing, and items or toys they might want, but don’t need. This is a great way of introducing the concept of saving and the need to exercise restraint in their spending.
5) Involve them in the weekly shop
As you go around the supermarket, ask your children to choose the best-value combinations of set products and get them to do the adding up as you go from aisle to aisle. As well as learning valuable lessons, your new helpers can make your job easier at the same time.
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