Trading Craft for Calculators: The clubs raising financial awareness in children

Forget after-school football or arts clubs, new plans could see children swapping painting for pennies with the proposed introduction of savings clubs in primary schools. The plans, put forward by the Church of England aim to raise financial awareness from a young age. The clubs would be run by credit unions, with children saving small, regular amounts of money and taking part in running various groups, such as junior cashiers and bank managers. The scheme is also available to parents who will be able to set up accounts to save for expenses, like school trips and uniforms for their children.

The club is well placed in a generation of children who receive large sums of pocket money. Indeed, Mintel research shows that nearly a fifth (17%) of children and teens receive over £30 a month in pocket money, with the figure only increasing with age.

Additionally, children’s practical learning will be reinforced by classroom teaching materials, which would cover areas like understanding the role money plays in people’s lives, how to manage money and would look to raise awareness by exploring the emotional aspects of dealing with money. The teaching packs will also provide practical ideas for schools to promote generosity from a younger age, in the hope that it will transfer to the child’s later life, engaging them in charitable giving and fundraising.

The pilot scheme would initially be launched in Church of England primary schools in three areas, with the aim of rolling out the initiative to a further one hundred schools. If successful, it could become a voluntary national financial education programme for primary schools.

17% of children and teens receive over £30 a month in pocket money, with the figure only increasing with age.

Whilst still an emerging idea, giving children the opportunity to learn about financial management is steadily gaining ground. For example, kiddiBank allows parents to transfer and keep track of money given to kids, whilst also giving them the facility to learn about managing money, savings and online banking.The online pocket money bank also allows grandparents to contribute financially, whilst also letting divorced parents look after the interests of the children they might not be living with.

Another initiative includes the Osper debit card for children aged 8-18, launched by a London start-up. It includes a mobile-only banking service and combines a pre-paid debit card with a smartphone app, which allows children and parents to monitor their spending habits. Osper’s competitor, goHenry, targets the same market of kids aged 8-18 and includes a pre-paid Visa card to allow children to spend their pocket money, with some safety restrictions on where it can be spent.

Today’s generation of children face increasingly complex financial futures, so financial education from an early age could be instrumental in them becoming more financially responsible adults later in their lives. However, it is not only later in their lives that children are learning how to manage money. Mintel data shows that nearly half (47%) of children and teens saved their pocket money in the month to March 2014. Younger children aged 7-9 are the most likely to squirrel their money away, as they receive less compared to older children and need to save longer in order to buy something they like.

It isn’t only age that appears to affect financial behaviour. Girls are considerably more likely to save their pocket money compared with boys, with over half (53%) saying they saved their own money, compared to 41% of boys. This could be explained by the type of items that girls tend to shop for, including clothes, shoes and accessories, beauty products, music and DVDS, many of which tend to be priced higher. And it appears the younger they are, the more saving-savvy they are. The youngest girls aged 7-9 are the most likely to save their pocket money, with 60% saying they save, perhaps showing that they develop an instinct for financial restraint earlier than boys, in order to buy something they really want once they have enough money.

As for the new plans for children’s savings clubs in schools, if rolled out nationally, these clubs could transform people’s lives in the future, as they would be given a better chance of learning a responsible approach towards managing money from an earlier age.

There is further scope for financial brands to get involved in similar initiatives, which further children’s financial education by allowing them to use their knowledge in practise. And with the rise of digital connectivity there is a greater potential for mobile apps and services to teach children how to manage their money from an early age. ‘Edutainment’ can also come into play, by using games and puzzles to help children learn the basics of saving, budgets and investments.