From whom do we learn to manage money
Money management is an important component of every family’s daily choices. Knowing how to do it well contributes to the financial stability and well-being of each member. A lesson that is learned from an early age: from the first piggy bank, to the tooth fairy’s penny, to the weekly or monthly allowance. Parents are the first with whom we talk about money, we learn to save, to plan and to understand that money is a fruit of our work.
In addition to learning from these lessons, children then tend to emulate their parents’ habits and automatically adopt those behaviors and strategies that are repeated over time: whether it is saving money, dealing with risk, planning to achieve one’s goals or the value of economic independence and work. As clearly emerges from the note “Money management models: how much the family matters” by Giovanna Paladino, director and curator of the Museum of Saving, the family is still today the main reference model from which children learn how to manage money.
78% of families involve their children in daily financial management: parents talk openly about money, sharing goals, desires and concerns.
However, this discussion about money remains closed within the family unit and is not reflected in external interlocutors, such as the school. In fact, there is still too little talk about money management with classmates and teachers, and schools are still unable to play a significant role in terms of financial education. We hope that including it within the civic education class will be an opportunity to level the starting conditions, especially for children who come from more disadvantaged families or who are less available for constructive dialogue.
Financial education in the family: from saving to investment
Parents’ financial habits are therefore passed on to their children: daily decisions regarding spending or the cost of free time activities are shared and important economic choices such as inheritance or purchasing a house are discussed.
As emerges from the Museum of Saving’s survey “Parents and children: how important is the family in the use of money by the new generations”, 93% of the parents interviewed declare that they have enough control over the family’s expenses. This behavior is also confirmed by youngsters who declare, in 80% of cases, to avoid purchases unless strictly necessary.
Also regarding the topic of savings, in 94% of cases, mothers and fathers declare that they think about managing income, dividing it between consumption and savings. This habit also affects 46% of children who prefer to preserve part of their pocket money for the future. In particular, girls experience greater satisfaction in saving, with the aim of then buying what they want.
As with the value of saving, expense control and planning, children always learn risk aversion and therefore long-term investment choices in the family.
For most parents and children “a bird in the hand is worth two in the bush”. In fact, they prefer the present to the uncertainty of the future, probably because the family lacks useful tools for managing risk.
The financial knowledge transmitted by parents is certainly useful for building the first approach to managing money, but the intergenerational transition also includes knowledge gaps, especially if no other interlocutors besides the parents participate. Financial education for adults is therefore fundamental to prepare young people to face the future with the right skills and with serenity.
To support parents in addressing the topic of money with their children, in addition to various initiatives including the webinar in collaboration with Moige “How to talk to children about money”, available here, the Museum of Saving makes available, free of charge online, the pocket money and advice guide.
But above all we recommend a family trip to Turin, to visit our museum, where thanks to video games, documentaries, animations and Artificial Intelligence installations parents and children of all ages can learn while having fun!