Thursday 8 December 2016

Adults must learn financial literacy lessons to teach children about money

Frank Conway

Published 06/11/2016 | 02:30

Irish adults score lower on financial literacy skills than many of our EU neighbours, according to the latest S&P Global FinLit report.
Irish adults score lower on financial literacy skills than many of our EU neighbours, according to the latest S&P Global FinLit report.

Earlier this year, I undertook a survey and was appalled to discover the low rate of financial literacy among Irish adults.

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Six out of 10 (64pc) failed to interpret how inflation would negatively impact their personal finances; 31pc failed to identify the appropriate level of life protection for specific life stage; and 41pc incorrectly identified the best means of managing their money to counter periods of high inflation.

Irish adults score lower on financial literacy skills than many of our EU neighbours, according to the latest S&P Global FinLit report.

Financial literacy matters; not least because it empowers families to make informed financial decisions. Of critical importance is that our long-term financial well-being is increasingly dependent on our personal financial skills. With greater life expectancy coupled with the demise of defined pension schemes, our financial health is in our hands.

Poor financial skills can cause increased financial stress which research suggests can, in turn, lead to higher incidences of migraines, ulcers and depression.

Teaching adults core money skills is crucial if they are to successfully manage their future money needs. But the financial education journey must start much sooner than adulthood. Children as young as three begin to develop money awareness and at seven are developing lifelong money habits. It is crucial that early intervention prevents them from adopting poor money habits.

In the last five years I have promoted financial literacy at many levels, including secondary schools and in the workplace.

Over the last year the challenge of how to prepare children aged seven to 11 develop good money habits was undertaken. A big problem was that adults often lacked the necessary knowledge and skills to teach children about money.

Ollie is the first Money Magazine for children aged seven to 11 that promotes financial literacy. It provides an innovative feature that empowers adults (parents, teachers and even community leaders) to engage with children about money matters with confidence.

What is most encouraging is that whenever I discuss teaching children about money, the reaction is overwhelmingly positive. Adults, it seems, know the value of understanding money. So, while our financial literacy rankings might be low, the thirst for change seems to be high. With the right approach, Ireland can be a global leader when it comes to financial education.

Sunday Indo Business

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