The growing importance of financial literacy

The Corona crisis is the much-cited burning glass through which deficits as well as changes for the better suddenly appear even more concisely. This also applies to financial education and the importance it has, especially in times of great uncertainty. This is shown by a recent survey by BCG on behalf of the Austrian Bankers Association (May 2021).

According to the survey, 51% of parents now give even higher priority to financial education for their children than before the Corona era. For 40%, imparting financial knowledge to their children is still as important as before the pandemic.

But what exactly are the drivers behind this growing importance of financial education for children?

  • Time is money: Between holidays at home, home office, homeschooling and, unfortunately, short-time work, families have moved closer together during the pandemic. The result: more time for and with each other, which was also used to think and talk about money issues together. There were more reasons for this in COVID-19 times than before: existential fears, saving for the unforeseeable, postponing purchases. All of this, after all, confronts children with (financial) questions that parents naturally want to answer.
  • About online shopping and online rip-offs:. Studies show that e-commerce has experienced a sales boost of one-fifth in pandemic times. In addition, almost a quarter of all consumers now go shopping with their smartphones at least once a week and online transactions have increased by 20%.
    In parallel to this online-centric shopping behaviour, however, security awareness is also increasing as far as online fraud is concerned. In fact, during the pandemic, on average “only” a quarter of consumers fell victim to online crooks, compared to 28% before COVID-19. This suggests an increased sensitivity when it comes to ordering and paying online, which is also reflected in the conversation with children: What can you order online and where? How do you pay safely? What do you have to watch out for?
  • Uncertainties, also for money: the more uncertain the times, the more cautious the spending behaviour and the higher the savings rate. In the first quarter alone, the savings rate of Germans was over 23%, whereas in the decades before it was between 9 and 11%. In other words, saving, spending control and financial emergency cushions become even more important topics in times of crisis, and are thus all the more frequently the subject of conversations between parents and children.

What is at the top of the financial education curriculum

According to the survey by the Austrian Banking Association, there are three topics in particular to which parents have attached growing importance to financial education during times of pandemic.

  • With 34%, saving behaviour and the motivation to save are at the top of the “lesson plan of money knowledge”.
  • Close behind at 33% are spending control and keeping track of one’s finances.
  • Likewise, precautions against fraud and theft and paying on the internet/via mobile phone have become more important financial education topics for 32% and 29% respectively.

Money comes up

The Corona burning glass cited at the beginning points to a need for action in terms of financial education among Austrian children. 57% of the parents are convinced that their own child is moderately or less well informed in dealing with finances. Only a little more than a quarter believe their children are well equipped when it comes to prudent handling of their own financial resources. All the same, 16% would sign that their children are very good at handling money.

On the other hand, 99% and thus practically all parents surveyed talk to their children about money, 84% at least once a month and almost one in four once a week or more.

But what exactly is talked about when it comes to money? And on what occasions do parents talk to their children about money? According to the study, financial education in this context tends to be a random product, as half of the parents talk about money with their children predominantly or mostly by chance. The younger the parents, the higher the degree of randomness. This is different for single parents: they in turn target the topic of money knowledge much more consciously than patchwork families.

Money comes into play

A good third of the parents surveyed would like external support in financial education, primarily from schools and followed by banks. When it comes to tools, board games and children’s books take the top positions. Apps that teach money knowledge in a playful way are currently still below their usage potential, but are arousing increasing interest.When it comes to overcoming barriers in conveying financial knowledge and increasing the learning motivation of both children and parents, gamification is the key to a playful approach to the topics surrounding liquid assets. Whoever says at this point that you shouldn’t play with money is right.  Gamification is actually something quite different: educational games and challenges that expand knowledge about money in a playful way.

Money knowledge at every opportunity – with the Finny App

It’s hard to explain what debt is, how and why you actually save and how cryptocurrencies work between dinner and brushing your teeth. But it is all the better, more structured and more vivid with the great financial knowledge challenges that the Finny App offers children and parents.

Through the app, parents are actively and regularly encouraged to take up various financial topics with their children. This creates structure and regularity instead of random money talks with the children between door, corner, dinner table and brushing their teeth. The most important financial terms can be taught and explored in a playful way, and the “aha” effects come gradually and naturally.

Parents are reminded not to miss their financial knowledge training with their children and to actively participate in the imparting of money knowledge with small brainteasers. Here and there, the creative side of the money vein and the tinkering gene for the bank account have to be activated.

Children receive a reward for every challenge they win. This, in turn, helps them to climb up the leaderboard level by level. After all, money-savvy people are the real winners, even and especially at a young age.

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