4. Enhancing basic money skills and values: Ages 7–10

Article four of a special series of eight articles by Justine Davies

 

Learning how to manage money is important for people at every age and stage of life, and the lessons that we teach our children now in relation to good money habits can enrich them as adults. Research shows that many of our attitudes and behaviours are entrenched in our subconscious before we reach our teens – and our attitudes and behaviours towards money are no exception to this.

Financial literacy and the national school curriculum

In 2008 consumer and financial literacy became a part of Australia’s national school curriculum, with a documented framework of learning for Years 3, 5, 7 and 9.

As parents, this provides a fantastic opportunity for our children to enhance the basic money skills and values that we continue to teach them on an ongoing basis.

Providing children with the opportunity to develop financial literacy through the schooling system is something which Ms Delia Rickard, Senior Executive Leader, Consumer and Retail Investors, is passionate about.

“It’s so important to teach financial literacy at schools because it is the one time that we have a captive audience across all social strata,” she says. “Some families will teach fantastic money skills to their kids; some will teach terrible money skills; some won’t teach them any skills at all.

“But by incorporating financial literacy into the national curriculum we can hope to achieve some generational change.

“It’s also a time to catch the kids before they have had a chance to develop bad money habits – or before bad habits have had a chance to become established. It is a major social justice issue, being able to understand monetary concepts, and being able to handle money competently.

“Financial literacy is now a permanent part of the education system – it is entrenched in the national learning outcomes. We are continuing to work with teachers to ensure that it is implemented in a way, which appeals to the students and which the teachers are comfortable with.

“It’s about providing teachers with a good understanding of the framework and helping them to view the framework in a holistic way, and to understand that financial literacy can be incorporated across the board, irrespective of whether you teach Maths, English, History or Geography.”

Definition of the framework

The ‘framework’, which Ms Rickard refers to is what the Ministerial Council on Education, Employment, Training and Youth Affairs describes as the ‘four interrelated dimensions of consumer and financial literacy’. Each of these dimensions has a set of specific learning outcomes for Years 3, 5, 7 and 9.

These dimensions are:

  • Knowledge and understanding about the nature and forms of money, how it is used, and the consequences of consumer decisions.
  • Competence in the application of consumer and financial knowledge, and skills in a range of changing contexts.
  • Enterprise with regards to using initiative, building financial capabilities and managing risk-taking when making consumer and financial decisions.
  • Responsibility in making the appropriate consumer and financial decisions that display care for self, others, the community and the environment1.

An overview of framework goals

An overview of the broad goals of the financial literacy teachings in Year 3 is as follows:
‘Students explain what money is and that money is more than notes and coins. They understand that family income can come from a variety of sources, is often limited, and that individuals often have a plan or budget to use their money. They explain the reasons why they want some basic goods and services, and recognise that decisions to spend can be influenced by advertising and peer pressure.’ 2 ( Please refer to Reference 1 for a detailed summary of the Year 3 learning outcomes).

 "It’s important that the financial literacy information is put in a contemporary context by both parents and teachers,“ says Ms Rickard. "Children want to know how it applies to them. Often they won’t grasp the mathematics of an abstract concept, but if that same lesson is placed into a contemporary context, such as how much it costs to fill the car with petrol, they get it."

Learning opportunities

Having lessons reflect real life is something which Celia2, a Year 3 teacher in NSW, fully supports.

“The children learn so much more if they can see how the lesson can affect them,” she says. “In terms of financial lessons I run action based units, which involve the kids setting up their own business.

“Last term, for example, we ran a Kids Kitchen. It was up to the students to work out the cost of the ingredients and put a value on their time, and hence, determine a selling price to make a profit.

“They had to produce a profit and loss statement, which gave them a good idea not only of what is involved in running a business, but also of the effort required to make a profit. It gave them the notion that money doesn’t grow on trees.”

Parental involvement

In terms of parental involvement Celia2 believes that one of the most valuable ways that parents can support their children is by making them earn their pocket money.

“The kids enjoy having a bit to spend,” she says. “At this age it’s mainly tuckshop money and a little bit of pocket money. But I observe children now getting a lot of money that they don’t have to work for.

“If they don’t have to work for it, it doesn’t teach them the value of money. With no effort of their own they’re given the money to buy the toy that they want – but do they value the toy?”

Ms Rickard, of ASIC (Australian Securities and Investment Commission), adds that setting our children some savings goals is a great way to help them learn that toys, clothes and treats aren’t simply an automatic right.

“The innate budgeting that previous generations had to do, because credit wasn’t so easily available, often doesn’t seem to be there now,” she says.

“Delayed gratification isn’t a bad thing and it can help to give children a sense of prioritising money. It helps them to understand the difference between needs and wants.” 

Hints for parents

  • Familiarise yourself with the documented learning outcomes for this age group, as outlined in Reference 1.
  • Help children to make the most of their spending money by ensuring that they ‘earn’ it through chores.
  • Help children to gain a realistic notion of the value of their time by paying them an appropriate amount for the work that they do.
  • Continue to keep cash visible, but begin to introduce your children to the concepts of eftpos and credit.
  • Set savings goals for your children to reach, to help give them a sense of budgeting.

Resources

1 Source: Ministerial Council on Education, Employment, Training and Youth Affairs: National Consumer and Financial Literacy Framework. www.mceetya.edu.au

2 All teachers interviewed for Teaching Children About Money are previous recipients of the NEiTA 2008 ASG National Excellence in Teaching Awards. www.neita.com.au