I have written many times about the importance of teaching our children the basics of finance from an early age. (Article about financial education of children here and here, about bad financial habits from childhood here.)
Behavioral patterns learned at a young age accompany us throughout our lives and fundamentally determine our future decisions.
I found a staggering Australian survey where 4,000 children, aged between six and thirteen, were asked how much pocket money they received, why (just for homework, school spending money, etc.) and what they started with. The family background of the children covered the whole of society in financial terms, poor among them, as well as those of a particularly rich family.
The first question was how much pocket money they get
The average was $ 11.27 per week, the average for six-year-olds was $ 5, and those for 13 were $ 20 per week. The first surprising finding was that the poorer the family, the more pocket money they received. For families with incomes below $ 50,000 a year, the average was $ 14.81 a week, which continued to fall to $ 8.32 up to $ 2002 a year, and even above $ 200,000 the average was only $ 10.05 a week. That is, the better the family is, the less pocket money the child will receive.
On average, 46% of children buy a toy from their money, 40% make it to the bank, 30% spend some on sweets and 28% save on something special like bikes and the like.
While a quarter of the poorest collect money for a special purpose
And only one in three makes money in a bank, in every best-earning family, one in three children raises money for a special purpose and half goes to the bank. The situation is not much worse for families with better than average modes.
Nearly one-third of the poorest said they would not put their pocket money at all, and only about one-tenth of the wealthy and the rich said the same. Now you’re quick to cure that, of course, the richer kids get less money and spend less because they get it anyway, so they don’t need pocket money or spend it.
Well, that’s not the case. 22-24% of poor and lower middle-class children said they get whatever they want, while in affluent families this proportion is only 14-16%. When asked whether to grow up, get rich or be happy, 19% of the poorer children chose riches, while only 12-15% of the wealthy thought the same way.
For me, this survey clearly shows that one of the secrets of financially successful families is the good treatment of money that they pass on to their children, teaching them the need to save and managing money well, and the other side of this is that they already see bad financial patterns at home, which will most likely make bad financial decisions as an adult.
If you want your child to succeed financially, start teaching right now to understand the value of money and work, and the need to save. Linked writings at the beginning of this article can help. If you want to know more about finance, come to the Academy and the next one will be coming soon. For just $ 25,000, you will learn everything you need to know in a basic way in six steps.