Another Friday, another season, as we’ve made it through the first official week of autumn. Celebrate by kicking leaves with your kids in the park, putting on a warmer sweater and reading the latest news in children’s finance! See our highlights from this week below.
A study conducted by YouGov on behalf of the British Bankers’ Association (BBA) and the Personal Finance Education Group (pfeg) has revealed that the majority of children ages 8-11 spend online, buy apps and have online banking accounts. The study showed that more than two in three children receive their first bank account and mobile phone before secondary school. Nearly 85 per cent of 8 to 15 year olds have bought items online, or have had someone else buy something online for them. At the same time children are spending online, they have little understanding of how money or their bank accounts work. Only 23 per cent of 8-15 year olds surveyed understood how a current account worked. While 27 per cent said they were aware of basic banking terms, they said they did not understand any of them well. Something for parents to think about when introducing the Internet and mobile payments world to children and an area where we can definitely help; we created goHenry to help young people understand their accounts and how their earning and saving relate to their spending choices - why not read more about us here.
Psychologists say no, according to a recent series of experiments across 200 urban schools in America. They tested the hypothesis by promising a random group of students with a monetary reward for completing assignments and another group not. The impact of a monetary incentive was shown to be ‘statistically zero in each city.’ A similar experiment conducted in Ohio, which offered a ‘pay for performance’ incentive only saw very slight improvements in maths scores. Whilst we know that learning is its own reward, we also know that in the home, rewards for household chores and tasks is a fantastic way to enable young people to earn – and to learn about the money cycle of earning, saving and spending. Read more about the debate on whether you should pay your children for doing chores here.
Bill Gates, Andrew Lloyd Webber, Nigella Lawson and more multi-millionaires have publicly stated they won’t be passing down their fortunes to their children. “I am determined that my children should have no financial security,” says Lawson. “It ruins people not having to earn money.” Others, like Texas oil tycoon T. Boone Pickens, Hedge Fund Manager John Arnold, and Jackie Chan shared similar sentiments when it came to passing down their inheritance to their children. “If he is capable, he can make is own money. If he is not, then he will just be wasting my money,” Chan said of his son. All rather controversial words from people who certainly know a thing or two about a large bank balance.