Basic financial concepts such as "saving for the rainy day," sticking to one's budget, and "money doesn't fall from trees" should be taught to kids as early as possible, a Citigroup-commissioned study released last week said.
"Financial education needs to be part of our basic education. It will provide individuals with lifelong skills to better manage their finances," Donald J. Johnston, secretary general of the Organization for Economic Cooperation and Development, said during the Citigroup-INSEAD Financial Education Summit in Kuala Lumpur, Malaysia last month.
Conducted by Shih Hsin University, the poll involved 3,179 pre-test, 2,695 post-test, and 228 teachers' questionnaires. The survey, conducted from September 1 to November 30, 2005, covered Grade 3 to Grade 6 students from 30 primary schools in Taipei's 11 districts. The study was conducted before and after those kids' school activities.
Study results showed that primary students possessed basic money concepts and that they had rapidly growing purchasing abilities and wants.
According to the survey, 91.7 percent of those students polled agreed with the notion that "money comes from hard work. It doesn't fall from the sky." More than 90 percent of the students who took part in the study also understood the purpose and function of an automated teller machine; and 93.5 percent said they were aware that "taking money without letting your parents know about it is wrong."
Those polled also gave interesting responses to the query, "If you were to buy a toy, will you use your allowance or your parents' money?"
Nearly 23 percent of the senior students (fifth and sixth graders) who took part in the poll said they would use their parents' money to buy toys - higher than the number of junior students (18.3 percent) - third and fourth graders - who said they would use their parents' dough.
Analyzing poll results, Shin Hsin University said a significant number of senior students were "easier" to influence due to their high level of awareness and exposure to media advertising and other information.
Junior students however are not as "exposed," and can better imbibe the values being taught to them at schools and at home.
"The other possible explanation is that senior graders have stronger purchasing abilities and more 'purchasing wants' than their junior fellows. (Those senior kids may be saving) their own money for other purposes," the study said.
Survey results showed that elementary students' purchasing power grows rapidly when they enter the fifth and sixth grades.
It also indicated that schools should teach those kids sound financial concepts during this "golden growth" period, it added. The concept of "saving" should be one of the first lessons that are taught to grade schoolers, the study said.
"(Those) research findings have once again reiterated the importance of (teaching kids basic 'dollars and sense' concepts at a very early age). Ninety percent of those students polled believe that 'wearing branded products will not make a person popular.'"
This indicates that elementary students are not easily influenced by advertising, the study said, and that they are like "blank" or "white" sheets compared with teenagers and adults.
Almost 98 percent of the teachers polled believed that a progressive financial education program was "very important" for primary school students.
The concept of "saving" is the first thing that should be highlighted during this stage, the teachers said.
Launched last year, the Citigroup Kids Wealth Foundation rolled out a financial education program that taught children basic financial concepts such as "keeping a daily budget," "saving," and "comparison shopping."
Kids who attended school sessions conducted by the Citigroup Kids Wealth Foundation and If Kids Theater Company appeared to be absorbing those valuable lessons, Citigroup said.
The number of students who agreed with "keeping a daily budget" (11.13 percent) and "saving a portion of my pocket money" (2.20 percent) increased significantly after enrolling in Citigroup's financial education program, the bank said.
The number of students who agreed with "comparison shopping principles" also grew to 13 percent.
"These numbers do not only signify the program's effectiveness, it also proves that innovative teaching methods such as 'drama performance,' 'comic book learning kits,' and 'interactive games and discussions' (work)," Citigroup said.