First steps to financial literacy
Dubai workshop teaches children to be sensible with money and become financially savvy adults
Saif Sondon, 13, is a fairly typical teenage boy when it comes to money. The Egyptian, who is a pupil at Nord Anglia International School in Dubai, gets Dh500 a month from his parents, “and more if I earn it somewhere else or if I sell some of my stuff,” he explains. “Sometimes I spend it on clothes, games, or going out. Clothes don’t have to be expensive, mid-range is fine – I’ll wait for the sales and then buy them. I don’t like to go shopping much because I don’t have all the money in the world to go shopping with. If I did, then I’d enjoy it more because I’d buy the expensive brands of trainers that I really want.”
For the past five weeks, Saif has been attending an hour- long financial literacy course every Saturday morning, organi sed by the company Kids Finance Initiative. Classes are in two age groups, 9 to 11 and 12 to 14, and the first eight-week course, costing Dh640, is currently taking place at Uptown School, Jumeira Baccalaureate School and Dubai British School.
Saif claims that what he’s learnt during the course is already having an impact on his spending habits. “Before I used to spend money whenever I had it, but now I’m going to give 10 per cent to charity and then save the rest for my future. I could put it into a bank and it would double with interest, so in a few years there would be more money – or I could buy something for Dh1,000.”
The brains behind the new initiative is Marilyn Pinto, a mum of two girls, ages 8 and 10, who noticed that although her daughters were thriving academically, they had “no clue” when it came to money. “I actually thought I’d teach my own children about finance last summer, but it didn’t go too well because after two weeks I wanted a break myself, and it’s difficult when you’re teaching your own children. But I realised that if I found this gap in the school curriculum, other parents might be interested in teaching their children about these concepts too.”
But Ms Pinto initially met with some resistance to the idea of teaching financial literacy to children, from fellow parents. “They understand the need for karate, ballet and other run-ofthe-mill after-school activities, but financial literacy was a novel concept. They asked me, ‘Is that all maths?’ ‘Isn’t it too complicated?’ ‘My kids are innocent, do we have to expose them at this age?’ But I believe that the earlier we talk to kids the better. After all, advertisers are now actively targeting young children on social media, so it’s now even more important that they learn early on in life to question what is a ‘want’ and what is a ‘need’ when it comes to spending.”
The eight-week course that Ms Pinto is running, which is taught using an activity-based curriculum from the American National Financial Educators Council, a financial literacy company, delves into much more than just handling pocket money. Topics range from budgeting, investing and managing debts, to entrepreneurship and charity.
“We are looking for kids to set goals, to realise that money is a means to an end,” she explains. “We get them to identify what kind of lifestyle they would like, what are their dreams and why money is important to achieve their goals.”
In her role as a “money coach”, Caroline Domanska of Moneymindsetcoaching.co.uk, helps grown- ups to form healthier relationships with their money. But Ms Domanska, who coaches in Dubai and in the UK, explains that the way we spend money stems from lessons we learnt as children from our parents. “A lot of children are told by their parents, ‘We can’t afford this toy that you want at the moment, not today’ – so they’re told they can’t have it, rather than ‘Well if you want that thing, how are you going to go about trying to get it?’ It’s a subtle shift in how you approach it. As children, if our desires get squashed, then we take that into adulthood. We still think things aren’t quite achievable for us – that we’re not quite the person who would earn half a million pounds, or who should be driving that car. We get that from our backgrounds.”
One of the teachers on the financial literacy course is Manisha Daya, a British accountant and mum of two, whose own thrifty relationship with money was shaped by her father’s upbringing. “My grandparents were very rich back in Zimbabwe and through bad business decisions they lost everything, including their house,” she explains. “My father then had to use his basic survival instincts, because his dad lost his mind. He had huge responsibilities and grew up having to watch every penny. He later became a teacher and put us through a good education, always reminding us of the important things in life. Holidays were a very big luxury, and we always were taught to always watch our pockets.” Ms Daya teaches the same prudent financial lessons to her 6- year- old daughter. “She doesn’t get pocket money, but we make her aware of money – to look for the red sale tags when we’re going through clothes in the shops, for example. I put seeds in her mind to be money-savvy.”
On the course, Ms Daya teaches the children about the three main money mindsets people have – “roadblock” – someone who is not thinking about money and is out of luck when bills need to be paid, “bullet train” – someone who knows how to save money and can use money to achieve their life goals, and “blinder” – someone who is focusing on money all the time and doesn’t live life to the fullest. Ms Daya – who is hoping to shape her class of seven 9 to 11- year- old girls and one boy into “bullet trains” – asks them to think about their long-term goals. One aspires to be an Olympic swimmer, three would like their own pet dog and one wants to own 100 different- coloured cars. “Write down your longterm goal on paper and stick it up somewhere where you can see it every day,” Ms Daya tells them.
One of the most popular longterm goals for most adults is buying a house. According to a study undertaken by HSBC Bank in the UK, the average child receives £131,832.94 (Dh588,958) in the first 25 years of their life through pocket money, tooth fairy donations, gifts and money for odd jobs and part-time work. By saving 25 per cent of these “earnings”, a 25-year-old could have enough to put down the average deposit of £32,000, the study claims. In the UAE, according to Ms Daya, children often don’t feel the need to spend their pocket money because their parents pay for what they want anyway. “It’s a spend, spend, spend environment,” she says. “Children often save their pocket money because they never need to use it. The mindset of parents here is very different.”
According to analysts at Euromonitor International ( EMI), typically, a child in the UAE between 9 and 15 years old receives between US$15 to $70 a month in pocket money, while children over 15 receive from $70 to $220. The spending power of youth is something that advertisers are increasingly aware of. Last October, a coalition of advocacy groups urged the US Federal Trade Commission to crack down on online influencer ads aimed at children. “Owing to their immature cognitive development children – especially younger children – have difficulty differentiating between content and advertising,” the complaint reads.
The subliminal advertising makes it more important than ever for children to be aware of their spending impulses, says Ms Pinto. “They are already being bombarded by so many advertising messages, and it only gets worse as they enter their teenage years. Kids today are spending so much more money than any previous generation, and advertisers know that – they know a whole lot more about the spending habits of our kids than we do sometimes. And they’re getting cleverer at hiding their advertising in social media. It’s actually scary.”
Ms Pinto makes sure that her own children learn to question the advertiser’s motives as much as possible. “When we hear ads on the radio we actually dissect them together. I ask: ‘ What is this about, what are they trying to sell you?’ ‘Is this a good advertising message?’ Once you start talking to kids about that, they are switched on to not just sitting back and absorbing all the messages and saying: ‘Oh, this pizza is good.’ They can ask: ‘Is it really good, and do we actually need it?’ Making them aware is the first line of defence.”
The next eight-week course begins on the April 15.
‘ But I believe that the earlier we talk to kids the better. After all, advertisers are now actively targeting young children on social media Marilyn Pinto founder of Kids Finance