From the Desk of Melanie Jane Nicolas – February 2013

Parents often ask, “How come we weren’t taught all the good stuff about money when we went to school and how come our kids aren’t taught about money at school now?” The fact is, kids are taught about money at school. They are taught what it looks like, how to add it up, and how to work out percentages. Some kids, if they choose the right subjects as they grow older, can have the opportunity to learn how the government wants them to manage their money to meet legal and taxation requirements. The problem is, kids were taught how to count, but they are not taught what counts. What’s missing and what kids would really benefit from being taught is how to MAKE it and VALUE it so they invest and manage it wisely in order to become independently wealthy!

The reality is that the vast majority of teachers are in the profession because they love to teach, help people and are passionate about learning. They certainly don’t do it for the money. Most of them are paid quite poorly when you consider the complexity and responsibility within their role. Teachers who are out to make a difference in children’s lives rarely have an entrepreneurial mindset. Very few are likely to be able to model and teach how to become an entrepreneur and how to make money work for you through investing in assets that generate income. Most of them never learnt it themselves and don’t have it on their radar as being important. They are more likely to teach what they model themselves – study hard, go to college and get a secure, well paid job.

Prior to the Industrial Age, children spent most of their time with their parents. Their parents taught them everything they knew including what was important to them (their values) and work skills. With the onset of the Industrial Age, children started spending more and more time at school and less time with their parents. The school curriculum primarily focused on teaching work skills to help children secure a job. Education about values was rarely in evidence. As consumerism took over and parents decided that both needed to work to buy all of the things they wanted, they spent even less time with their children to discuss values and day to day living skills such as money management.

Parents were now expecting the education system to teach the real life skills. However, the classroom environment at most schools is very different to real life situations. They do not replicate the companies you work for nor deal with money as in the real world. It is virtually impossible for school teachers to make learning about money meaningful for students when at best they can only use play money and simulated situations in the classroom, and most schools don’t even do this.

Ask yourself, “When did I get real about money?” Most people answer that money only really affected them when they didn’t have enough. One of the main pain points many people experience is when they discover that they don’t have enough money to live away from home. This pain point of being cash poor severely limits the independence they crave. Once they experienced a painful enough event in their life, they decided to learn how to make money for themselves and to later work out how to increase the amount they made. For most people, once it became about real money and real purchases and real work and real independence, they really started to learn.

The problem for many is that they only started to learn once they had their mortgage and steady job. Then they remained in an almost trance-like situation of going to work to pay the bills. They forgot to continue to learn more about money in order to keep improving their financial situation. In what seemed like no time at all, the kids grew up, went to college, and left home. The cycle then begins again and now they continue to live in this “box” society has created.

The parents were so busy working and running manic activities schedules for the children, they didn’t even notice they weren’t making the time to learn about how to really get their money working for them. It was all perfect, because raising their children was the most important thing in their lives. They just forgot to step back and realize that by spending some regular and dedicated time on learning about money, they could have saved a great deal of time in the long term and also earned them a great deal more money than just working their day jobs.

Parents didn’t learn to be entrepreneurs when they went to school. It would be highly unlikely that schools can train their teachers to be entrepreneurs today either.

Fast forward to the present, parents trust that their children are learning the value of money and these life skills at school. They are often surprised when they leave school and to not have these financial skills. Young people are finishing school, whether high school or university, with a whole set of skills that are sadly underdeveloped, and these are skills crucial to their success. Students are simply not learning the skills that matter most for the twenty-first century.

As parents, you have the perfect opportunity to help your children learn about money from an early age, preferably early enough that they learn really good habits around wealth creation and not even notice they are learning. Good modeling and habits as part of your family life are amazingly powerful tools for success. Committing some time and effort in the short term will save you and your kids in many ways in the long term and everyone gets to win and have a better life!