Money Matters Matter
In honour of Global Money Week this week, let’s talk about an important issue: financial literacy. With the cost of living consistently going up, it is more important than ever to be aware of how to manage the money we have and at minimum, understand how wealth is built.
So, considering this, it’s startling that less than 1% of children and young people internationally are educated about finance or even have access to financial literacy programs. As a result, their futures become almost set in stone. They inherit an inability to manage money, which encourages debt, financial dependency and the endless struggle of working to make ends meet.
It’s true that wealth results from stability in all aspects of life; financially and otherwise. But the resource of money impacts every area of our life, our housing, ability to access medical treatment, education and transportation. One could say it’s a fundamental skill set that every child should be learning in their six hours per day at school.
What is Global Money Week?
This year’s Global Money Week theme is ‘Money Matters Matter’. We can’t sit by and dismiss the importance of building financial awareness from a young age. It may be heavy, it may be mundane, but it’s fundamental.
As it stands, financial education has never been a priority in Australian schools. There is a striking absence of formal financial literacy programs for young students, so it’s not hard to place where the financially complacent attitudes of many young people are born.
The shared ethos of Global Money Week and Thalia Stanley Group is that financial literacy should be made attainable to every individual, man or woman, young or old. Financial literacy is the key to empowerment and independence and it’s particularly important for our children, who’ll make up our future leaders and our future inspirers of change.
“By empowering children and youth, we can help them create a positive wave that will expand from themselves, to their families and to entire communities.”
Creating positive money stories
Our relationship to money starts young. Somewhere between the ages of 3-10 we establish a belief system surrounding money. This is something we usually inherit from observing our parents’ behaviours and conversations about money.
In our adult life, this usually becomes our ‘money story’, which drives our actions and outcomes with money. Hence, a formal educational framework that teaches the basics of managing money and building wealth becomes so critical. Only then will children be able to break the cycle and challenge the inherited patterns and beliefs of their parents to create better skills and financial outcomes for their own lives.
They say that wealth/poverty is intergenerational, which I have certainly found to be true over my past twenty years helping adults with their money. Most individuals simply recreate their parents’ money behaviours, and almost all of my clients have never had access to financial literacy.
Global Money Week provides the opportunity to change this trend, to inspire each of us with the notion that it is never too late to learn a new skill and by doing so, set a better example for our children. Here are some simple steps we can all take to be a part of this change.
1. Have open discussions about money and explain where it comes from – i.e. the exchange of effort/service in return for a wage or income. Regardless of your own job title, show your children how different careers earn different money, whilst reinforcing that one is not better than the other.
2. When children are involved in budgeting, they learn to differentiate from a young age between needs and wants and to spend in a more responsible manner. I openly share the facts of my finances with my ten-year-old son. Give your child a shopping list with a set amount of money and let them experience the reality of not having enough for the items they want, or having change leftover.
3. Taking on a part-time job fosters a greater sense of responsibility surrounding money and allows youths to practice real life saving and goal setting before the pressure of entering the workforce full time.
4. Teach the distinction to your children that earning money and building wealth are two very separate skills sets. Playing monopoly can demonstrate this beautifully by showing them that one must buy assets that go up in value and provide a passive income to build wealth. Additionally, the ASX share market game gives children a virtual budget that they can use to invest in shares, teaching them about the economy and how to handle real life finances.
5. Be transparent about the family finances, for example, how much comes in, how much is needed for living costs, and how much is left over. Allow them to engage and be part of the processing and brainstorming about how to save money as a family, how to make more money, and ideas about how to turn that money into wealth.
It’s likely that most of us wish we knew more about money from an earlier age. Let’s not make the same mistake with this generation.
To find out more about Global Money Week, visit the page www.globalmoneyweek.org.
Contact Thalia Stanley Group who will put on a customised event for and your families/friends to teach you financial literacy. (Children programs also available) www.thaliastanley.com.au