|Function:||Investor Relations Director|
Only one in three children in Poland get pocket money. The lack of financial education leads to bad habits in the future
Most parents do not include their children in money-related discussions and home budget planning, and only one in three children get pocket money. Meanwhile, giving children even low amounts on a regular basis can become a good lesson for them on how to manage their own money. When it comes to older children, as highlighted by a specialist from Goodwill Consulting, it is worth replacing the piggy bank with a simple bank account to show the child in practice what saving is all about and how the accumulated capital is increased by interest.
“Children’s financial education should be started as early as possible. First, through play and games, and later by giving them pocket money to use while at school. In my opinion, this way you can teach the child, based on a real example, how he or she can manage their own finances,” Jakub Borkiewicz, Investor Relations Director at Goodwill Consulting told the Newseria Biznes news agency.
In Poland, nearly 80 percent of children aged 5–17 do grocery shopping by themselves. Most of them have their own budgets, and, as demonstrated by the results of the “Junior Shopper 2017” survey conducted by GfK, they spend up to PLN 285 m per month on sweets and snacks. Children and young people can also largely influence shopping decisions made by their parents, which makes them an important consumer group. This is why learning how to manage one’s own budget should be started as early as possible in order to develop good financial habits.
“School is a good time for children to start deciding on the snacks or healthy products they want to buy with their savings,” Mr Borkiewicz said.
Giving children pocket money on a regular basis can become a good lesson for them on how to manage their own money. The results of surveys carried out by the Kronenberg Foundation at Citi Handlowy show, however, that only 35 percent of parents give their children pocket money. On the other hand, 15 percent of parents declare that their children get money to cover all their needs, and there is no need for pocket money. In the future, this can result in not knowing how to save or even lead to wastefulness.
The surveys of the Kronenberg Foundation also demonstrate that 49 percent of Poles do not include their children in talks about finances, and only one in five engages them in the planning of household spending. Even fewer parents (17 percent) encourage their children to save money.
“Parents are the best teachers when it comes to learning how to spend money. They should be interested in the financial market and know more about financial matters. This will have a tremendous impact on the child, as the child absorbs their parents’ habits,” said Jakub Borkiewicz from Goodwill Consulting.
Even though many parents do nothing in terms of the financial education of their offspring, 90 percent of Poles claim that schoolchildren should be taught finances, and according to half (55 percent) of the respondents, this education should be the parents’ responsibility (the Provident Barometer).
“Children’s education should start with practice. Parents should diversify their property. It can be an excellent idea to open a savings account for the child or to show the child other financial instruments, such as bonds or various securities accounts. There are a great many possibilities. The most important thing is to remember about this aspect of education. As the twig is bent, so grows the tree, and the earlier the child understands the essence of investing and saving, the better they will be at it in the future,” Mr Borkiewicz said.
When it comes to older children, it is worth replacing the piggy bank with a simple bank account to show the child in practice what saving is all about, and how the accumulated capital is increased by interest. It is best to opt for a simple, cost- and service-free financial product.
As demonstrated by surveys conducted by OECD in the previous year, financial education in Poland, also among children, is a must. Out of thirty OECD countries, Poland was ranked last in terms of financial knowledge and awareness.
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