No childish matter

Netherlands NGO that teaches the concept of money to the young worldwide says one of the problems in China is overspending

On an early morning in central London in March, a group of 50 British pupils from three schools gathered in the head office of the London Stock Exchange.

There, with a 10-second countdown - historically a bell or electronic bell, now a modern installment with flashing lights and thrilling music - the pupils witnessed the daily start of trading on the world's most international market, established more than 200 years ago.

The visit was part of an international money matters awareness campaign called Global Money Week. It calls for communities in more than 125 countries to engage children and youth to learn how money works amid the difficulties of discussing money matters across societies.

Global Money Week takes place annually during the second week of March and was initiated by a Netherlands-based NGO called Child & Youth Finance International in 2012.

The following year, Shanghai joined the educational campaign. At that point, the world got a better glimpse into how Shanghai children grasp the concept of money.

Last July, the Organization for Economic Cooperation and Development issued its assessment of the financial shrewdness of 15 year olds from several countries. According to the study, teens from Shanghai, China's most populous city, lead "by a wide margin" compared with their teen counterparts from other countries, revealing a much better understanding of basic financial concepts.

But Ines Garmegna, of CYFI's innovations department, argues that financial education does not only include teaching financial concepts, but also the skills and ideas of how to save and the capacity to deal with money.

And as CYFI's regional adviser for Asia and the Pacific Rene Cuartero explains, teens in Shanghai and in China have an evolving sense of what money means.

"One of the problems in China is overspending. Young people are definitely starting to buy a lot, and there is the competition or peer pressure among young people for better luxury brands."

That problem is exacerbated by China's new generation of mothers and fathers, most of whom remember childhoods filled with hunger and poverty in the 1960s and '70s and would like to give their children the treats they never had.

Because of the country's family planning policy, millions of young Chinese parents have propagated the prevailing idea of "Not letting your child lose at the starting line" and are likely to exhaust their entire financial resources to raise their children.

According to the China Chain Store & Franchise Association, Chinese parents spent 1.15 trillion yuan to buy products for children 12 and under in 2012. That figure is expected to rise at an annual rate of 15 percent to top 2 trillion yuan ($323 billion; 296 billion euros) this year.

Garmegna, who says she has lived in Japan, India, the Netherlands and the UK and understands the differences in their cultures of money, says, "Money is such a sensitive topic - how money works really reveals a lot about a culture. If I could choose one thing to know about a culture, money would be the top choice.

"Financial education is very different everywhere. You need to adapt to different countries and their needs."

China, as its economy has changed rapidly within a few generations, has spawned a wide generational gap.

"There is a disconnection between young people and adults, as the older generation still think children shouldn't handle money," Cuartero says. "Their attitude is not to talk with kids about money."

But the situation is not unique to China. According to a survey published in March by Money Advice Service, a UK independent organization, British parents "feel awkward discussing money" (according to 26 percent of those polled). Forty-three percent of parents polled say "children shouldn't have to worry about money".

Fifty-two percent of respondents say they discuss money matters regularly with their children.

But the survey also finds that nearly nine in 10 children aged 8 to 15 in the UK are aware of their parents' money worries. And perhaps they should, since skills to make informed money decisions later in life are vital.

According to a study from the University of Cambridge in 2013, children begin to form personal money habits by the age of 7, whereas parents most commonly begin engaging their children with lessons about money when they are 8.

"Money can be a subject many find particularly hard to cover, especially if it is an area which they struggle with themselves," says child psychologist Elizabeth Kilbey. "Many parents feel children should not be burdened with adult responsibilities, like worries about money."

In some countries, it is culturally inappropriate to discuss money issues.

Cuartero, who is originally from the Philippines, says: "Finance education in the Philippines therefore creatively approaches the matter, using animation that discusses around the issues, instead of direct discussion."

As for parents who find it difficult, or unnecessary to talk to their children about money, Kilbey suggests, "it can in fact be very empowering to give your children skills and confidence with money, so that they don't have to face money worries in the future."

Cuartero says the effort to give children a financial education does not necessarily have to be in parallel with a country's economic development.

"In Nepal, a country that's much poorer, the government has issued national level policy to help kids understand money. With less money, knowing how to spend is urgent."

Experts note that today's global finance sector is a product of complex economic and historical reality, making it a field of joint education for family, school, civil society and the government.

As to what China could do to educate its children about money, Cuartero thinks the government could make the kinds of investments that the UK made last year. In September, the UK included finance education into its curriculum for secondary schools.

Mieka Harris, education manager of Citi Money Gallery, hosted a free financial education youth conference in the British Museum in March. As one of the educational activities, it targets students from 9 to 13 years old on the topic of "Money and me", using materials in the museum that date from decades ago to the present day.

"Young people see their parents pay on cards, making online transactions but they often don't actually see any real money. If you don't have the emotions and associations with actually handing money over in a transaction, it's hard to understand what money is.

"In the gallery, we use the objects to depersonalize that situation and make it easy to discuss about."

She adds that "a lot of young people look at what celebrities and sports stars own and just assume that's what their lifestyle would be. Even when they are 18 years old, they don't really know how much a car or house cost. Sometimes it's hard to imagine how your personal finance situation can be affected by the current economy."

John Penberthy-Smith, customer director of the Money Advice Service, says he is worried about the constant pressures on young people to "spend, spend, spend".

"There's no advertisement that tells you not to spend. In fact, in the financial industry, 1.3 billions pounds are spent in advertising to tell you to spend," he says.

This year, Global Money Week is projected to reach more than 36 million children with the aim of sending a vital message to children: "Safe today, safe tomorrow".

Contact the writers through zhangchunyan@chinadaily.com.cn.

(China Daily European Weekly 05/08/2015 page26)