Learning to save: How children look at money at an early age

The handling of money is inherited

Consumption is now possible around the clock, and purchases can be paid for through many channels. Anyone who loses track of their current account, credit card, PayPal or Klarna and has possibly taken out a loan for the LED television from an electrical retailer is often lost. Martin Taborsky is responsible for financial education at the Oesterreichische Nationalbank (OeNB), he knows the background of many money problems among young people. In principle, the following applies: The family has the greatest and usually the most positive influence in terms of payment behavior and financial knowledge. If the parents exemplify a careful handling of money, that is already the proverbial half the battle. The school, on the other hand, could do more in terms of financial education than is currently the case, emphasizes Taborsky. It has been proven that the circle of friends, the so-called peers, has the most negative influence when dealing with money.

Pocket money: regular and unconditional

Martin Taborsky pleads for more problem awareness in schools, not least because financial issues are increasingly shifting to the Internet, going to the bank and emptying the piggy bank as well as the visible handling of money and payment slips have become obsolete. Financial transactions are conducted to the exclusion of children’s eyes and ears, which makes it all the more important for parents to consciously address the issue of money and to be a good role model for children in financial matters, says Taborsky. Pocket money, he advises, should be paid weekly from lower school onwards, ideally via your own bank account, and regularly and unconditionally. Pocket money is too often used as a reward or punishment, which should be avoided at all costs. It is important to let young people operate fixed costs themselves at this age, for example for their smartphones, and to make them aware of the need to build up reserves for any later major purchase decisions.

Financial education in school lessons

Together with six partners, the National Bank has set up an initiative for business education. A school trial is currently running in which the topic is taught in an interdisciplinary manner – because financial education is more than just adding and subtracting. Walter Emberger sees it that way too. In 2011 he founded the Teach for Austria initiative, through which young people coming from the business world teach in schools for a period of two years. At Teach for Austria, one finds time and again: Too many pupils leave schools without knowing what exactly they learned mathematics for. Yes, more financial literacy is needed, and that is practical, says Walter Emberger. Instead of focusing on “mathematical brain jogging” and higher mathematics, the subject should be used to explain financial knowledge in a practical and understandable way. For example, which tool case is needed to have the finances under control – for example percentage calculation – or by solving the question via arithmetic tasks whether the advertised zero-euro mobile phone is really free or what it actually costs.

Basic understanding of economics and numbers

Emberger believes that financial knowledge in schools is associated too much with stock market knowledge and securities, but schoolchildren need a basic understanding of economics and numbers, and that early on. Like education, dealing with money is inherited in Austria. It is therefore particularly important for children from affected families to learn to calculate wisely in order to be able to handle their own money carefully and not to make wrong decisions that can quickly lead to over-indebtedness. Last but not least, a well-known saying should be put aside, advise Walter Emberger and Martin Taborsky: You don’t talk about money. You should do that, especially in schools, even if it’s not always pleasant.

Set up a savings account in addition to a current account