Getting money message to your children
AS the dreaded back-to-school season begins, parents all over Ireland will have a job on their hands keeping those back-to-school expenses under control and within budget.
Since the economic downturn, personal budgeting has become even more of a necessity. But it does seem that the overwhelming majority of personal budgeting tools are targeted toward adults. But what about our children and young adults?
Surely it's just as important to teach them about money?
Most of us got our financial education from friends and family members who looked richer than we were, and look how that turned out. In fact, our 'relationship' with money is sometimes left entirely to chance.
But it remains that one constant in life for everyone and should be treated like any other relationship. It has to be understood, minded and kept under review.
Isn't it time our children got that message earlier in life?
We wouldn't dream of putting a child on their first bicycle without instruction and supervision.
For their first driving lesson, we make sure they're in the hands of professionals.
Passing on knowledge is what parents do, except in the one area that should not cost a second thought -- money.
In a few years' time, today's 15-year-olds will prepare to become more financially independent.
Leaving secondary school and going to college will be the choice of many. Others will begin training schemes or employment.
They will all have to manage money from then on, for the rest of their lives, whether it's student loans, their first credit card or even opening a savings account.
Financial literacy among adults in Ireland is often identified as low, so we must ensure that our young people are provided with a better preparation for their future financial well-being then we were. 'Cents and Sensibility' is a new book that does just that.
Written by well-known media commentators Frank Conway and Sinead Ryan, it's the first of its kind in Ireland as it is written specifically to improve the financial literacy of teenagers.
The book is presented as a narrative, in a fun, easy-to-read style, providing important lessons on debt, credit, banking and budgeting. 'Cents and Sensibility' is part of a wider drive by Mr Conway and Ms Ryan to deliver financial literacy lessons to students in classrooms. Many teenagers, when asked, claim to spend most of their money on call credit and downloads.
However, when they complete a budget planner, they often find out the highest expenditure is on food. "That's snacks on the way home, from school; fast food or a coffee with friends -- it all adds up," says Mr Conway.
"It's fine for kids to spend their cash on that, but they need to be aware they're doing it, so when they plan to save for something specific, like concert or festival tickets, they know what to cut back on," adds Ms Ryan.
Another important lesson teenagers can learn is how banks work.
Arguably, many adults have not got a clue either, and some might add bankers to that list too following the ravages of the last number of years, but 'Cents and Sensibility' takes out the jargon and likens banks to dating agencies.
"The job of the bank is to bring savers and borrowers together -- not in a romantic sense, but in a financial one.
"They give the former a very modest incentive to save and charge the latter a high interest rate to borrow.
"Teenagers are very quick to work out who the middle man is and how much money he makes. It's not rocket science," Mr Conway points out.
"But if we don't know how banks work, we can't expect to ask the right questions to get better value."
Irish Independent Supplement