We teach our children to read and write. It’s a priority. Why don’t we teach them to understand money? Surely financial literacy is as important as basic literacy?
Some people get this, and some people don’t, but I woke up to this big time reading a few recent articles. For example, Claer Barrett writes in The Financial Times that she’s worried about her niece.
I am all for giving children early exposure to money and payments, but what worries me is the invisibility of digital transactions versus the physicality of notes and coins. Do children realise that actual money is being spent, or think this “magic card” simply makes everything possible?
When banking is invisible, do people realise they are actually spending real money? If physical notes and coins have gone, do you know you are transacting real cash?
I’m sure, as an adult, that we understand this but what about kids?
A dad says he was stunned when his 11-year-old daughter unknowingly ran up a £4,500 bill on a gaming app. Steve Cumming initially gave the schoolgirl permission to spend £4.99 for the game, called Roblox, on his debit card. It was only when he checked his balance months later after setting up internet banking that he saw hundreds of transactions … his daughter thought she was spending monopoly money on the game and was shocked to find out what happened.
This is not an uncommon experience and begs the question: how are we educating our children about money? Do they know it is the controlling factor in our lives? How should we teach them?
Singapore’s financial regulator has reportedly suspended Bitget, a crypto exchange that is mired in a row involving South Korea’s biggest boyband, BTS … after it got into a high-profile dispute for promoting the digital currency Army Coin, which is named after the band’s followers, who are known as the BTS army.
When I was a teen, I was fanatical about David Bowie. If there had been a Bowiecoin, would I have invested? Damn right I would. In fact, I would have spent every penny I could scrape together in Bowiecoin. Thank goodness it was not around back then. Thing is that it is around today. What do our kids know? Do they understand that Army Coins are just a creation? What's worth more: Armycoin, Swiftiecoin or Sheeriocoin? [BTS, Taylor Swift, Ed Sheeran in case you didn't get it] ... there's even a Jesuscoin.
In another FT article, Lucy Kellaway laments that, as she has turned from journalist to teacher, her class think money is a game too. It’s a cryptocurrency game.
“I’m up over £100 in one day, bitches!” a boy in the centre crows. Others proclaim their gains in a conversation peppered with the words Shiba Inu, dogecoin and Elon Musk. Their form tutor looks on with a growing sense of unease. “Isn’t trading cryptocurrencies just like gambling?” she asks them. The student in the middle gives her a scornful look. “Nah Miss,” he says. “It’s investing.”
Someone asked me to explain the difference between gambling and investing and, tbh, there is little difference.
The value of an investment may go down as well as up and you may not get back the money you invested. It should not be assumed that the value of investments always rises. You should ensure that you have the financial capacity to bear the risk and only invest an amount you are willing to lose.
In other words, investing is gambling. That’s why we call it casino capitalism. But what does this mean for our kids, who don’t even know that money exists? After all, it’s just a tap, a click, an invisible thing.
If I trade an invisible thing then it’s like magic, isn’t it? And magic is just made-up stuff that is an illusion. And an illusion is just a thing that doesn’t exist, does it?
Chris M Skinner
Chris Skinner is best known as an independent commentator on the financial markets through his blog, TheFinanser.com, as author of the bestselling book Digital Bank, and Chair of the European networking forum the Financial Services Club. He has been voted one of the most influential people in banking by The Financial Brand (as well as one of the best blogs), a FinTech Titan (Next Bank), one of the Fintech Leaders you need to follow (City AM, Deluxe and Jax Finance), as well as one of the Top 40 most influential people in financial technology by the Wall Street Journal's Financial News. To learn more click here...