Back in the 1990s, the preferred way to pay for daily expenses was in cash. When we were children ourselves, we had little knowledge of the dimension of financial literacy, such as financial knowledge, behaviour, and attitude. Personally, I believe the main factors responsible for this to have been little pocket money, limited or no exposure to the internet, low decision-making power due to parental authority (i.e. only being allowed to spend pocket money by yourself on sweets and treats and having to consult your parents about buying more expensive goods). Many parents in those days believed that the only way for their child to succeed in life would be to go to school, achieve good grades, graduate and then get a good and financially secure job. It was altogether a different time of finance and living strategies, and although present-day parents still believe in that same academic way to success and financial literacy, it might not be the best way to achieve those goals any more. School is one way for children to grow into responsible adults, but definitely not the only way, and such an approach might not fit well for a child wanting to be its own boss.
The way children go about shopping has also changed considerably since the 1990s. Cash is used less frequently these days, especially amongst younger consumers. Online-shopping and paying by credit card has become the favoured choice for many young consumers. However, this has also opened up ample opportunities to easily and quickly accumulate debt by using up and overspending on one’s credit. In the meantime, credit card companies in co-ordination with banks and other financial institutions inundate parents with a multitude of credit opportunities for their children – the ability to apply for credit cards or pay off one card with another – and without proper knowledge and the necessary responsibility to check one’s balance, it is easy for a child to grow up to become a financially troubled adult.
Albeit just being a not-so-happy side of a coin, with the changing trends of how money is earned and spent, it is important for us to secure a stable future for our kids, not just in terms of proper education, but also in terms of financial literacy, best achieved by actively teaching them the necessary skills to become financially responsible adults, so that they may prosper in life.
Financial literacy for children is the confluence of finance, credit and wish-fulfilment management, and the knowledge necessary to make responsible decisions – decisions which are integral for their daily life. However, it should not come as a burden to their growing minds, hence why Fintune intends to make learning financial literacy, such as operating a virtual account and getting to know how it works and how to make the most of it, a fun experience.
Stay tuned for more.