The experts have their answers: when do children need financial skills?

In some cases, money problems can be avoided if consumers have some financial knowledge. “Financial competence is a shortcoming for many,” says Andrea Weidemann, 42, director of the Swiss Finance Museum in Zurich. It is heavily involved in promoting financial education for children, youth and adults, for example as part of Swiss Money Week. According to the researches, it is clear that the financial skills of the elderly as well as children and young people are quite low.

Therefore, according to Weidemann, financial education should be integrated much more into the school curriculum in Switzerland. “Currently, Lehrplan 21 states that only secondary school students have learned to use money ‘responsibly’. Whether this is covered and how it is handled is up to teachers. That’s too little.”

Many aspects of money

How is “financial literacy” actually defined? Basically, it’s all about how to make wise decisions when dealing with money. This includes creating a budget, knowing how and how much to save, knowing how to get and managing loans, and knowing ways to save for retirement.

The Finance Museum regularly organizes workshops on financial topics, even from kindergarten age. The focus is primarily on stock market issues, crypto, neo-banks and retirement issues. Weidemann notes that there are big differences from an early age: “Some young people already have portfolios and diligently trade securities, whereas their peers have almost no financial knowledge.”

Weidemann’s goal: To make teachers more enthusiastic about financial matters. But also politics. “There is an FDP initiative in Germany for the promotion of financial education nationwide, which we are following with great interest,” says Weidemann. There is still a patchy quilt in education policy in Switzerland.

But why should one acquire knowledge early on? “According to a 2014 study by the World Bank, if the general population were more financially competent, the consequences of the 2008 financial crisis would have been much less severe,” Weidemann says. This is the macro level. At the micro level, young people should learn as early as possible how to manage money proactively. “Young people can quickly get into big trouble if you don’t lay the foundations for financial skills at a young age,” Weidemann says.

As an example, he cites Apple Pay and the installment payment option Apple Pay Later. Intuitive payment by mobile phone is very easy and “dangerous if not accompanied by educational institutions and parent’s home”.

Parents have an important role

Here are the big differences. However, all adults should have basic knowledge of financial matters. Therefore, according to Weidemann, parents should teach children from the age of 5 to use money responsibly. For example, by giving pocket money. “Perhaps through officials who are rewarded for seeing the value of money,” Weidemann says. It offers less “free pocket money”.

The allowance should ideally be delivered in cash. “Concrete things” such as coins and notes continue to instill a sense of security and a special relationship with money.

When it comes to retirement planning, too, Weidemann explains, you can’t start early enough: “If you’re smart, you can invest 50 francs a month in an exchange-traded fund from the age of 20.” It may also require parental nudges or appropriate training to remove barriers in this regard.