In recent years, world-class financial education has been recognized as an essential life skill, shaping the younger generation to be responsible adults, socially and economically comprehensible, and capable of making informed financial decisions. The OECD includes financial education as one of the four important human skills (in addition to mathematics, reading comprehension and science). However, in Israel only about 8,000 students studied financial education in the 32 schools in 2021/22 (data according to the Knesset Research and Information Institute, 2022). In 2011, following Israel’s accession to the OECD, Government Resolution 3926 was adopted to increase financial education in Israel. The present article deals with the importance of financial education and practical ways to implement it in schools.
Why is financial education a necessary skill for every boy and girl?
Globalization, combined with digital technology, has made financial services more accessible than ever before. This accessibility poses a challenge to the economic conduct of the individual. According to a study conducted by C.I. Marketing Information, children and adolescents in Israel spend large sums ($2 billion) on self-purchases. In addition, young people influence their parents’ decision-making on consumption issues. At young ages, the effect will manifest itself when buying games, clothes or souvenirs from an enjoyable vacation. On the other hand, teenagers will already feel comfortable taking an active part in deciding on an annual vacation destination, buying a mobile phone or purchasing a car. In this reality, youth face financial decisions on a daily level. They consume financial services, manage a bank account, hold a credit card, make online purchases and deal with peer pressure in the consumer space.
What about school and financial education?
Access to money and the formulation of patterns of economic conduct are largely determined at an early age. Knowledge and awareness acquired at an early age will improve children’s ability to manage their money wisely later in life. A reasonable assumption is that the family education framework is the appropriate place to educate children, and to equip them with knowledge and tools for using money and understanding its importance. However, reality proves that 50% of families in Israel are not managing themselves financially correctly and a significant portion manage themselves with ongoing debt. This kind of role model means a returning generation of adults who don’t know how to manage their money properly. In such a reality, the formal education system is required to raise the flag and introduce financial education programs into the curriculum that will provide students with the necessary knowledge and tools.
What do financial education programs include?
Financial education programs deal with various topics, including: raising awareness and discussing common dilemmas and perceptions regarding money, identifying the factors that influence our economic conduct, familiarity with principles of wise consumerism, including online consumerism, experience mapping expenses and incomes, experience building a budget according to priorities, defining savings goals, recognizing rights at work and identifying violations of youth’s rights, familiarity with basic banking concepts and means of payment.
How do we integrate financial discourse into school culture?
The implementation of formal financial education programs in the curriculum will serve as an infrastructure for teaching wise economic conduct, imparting skills and tools for doing so at an early age.
At the same time, encouraging a school climate that encourages discourse on financial issues while addressing everyday situations will enable students to take a new look at consumption habits and decision-making methods in their socioeconomic conduct. Example actions that can be interwoven into the school climate:
- We will talk at eye level about concepts such as: important, worthwhile, worthwhile, taste and personal preference, priorities. We will use the terminology of ‘need to buy’ or ‘want to buy’ on a daily basis. For example, the purchase of a new item of clothing, a game or a phone will be an opportunity for this kind of conversation.
- We will use the time we work together with the children to talk to them about proper consumerism, purchasing brands or promotions at the supermarket.
- We will talk about the consumer meaning behind the advertisements. We will analyze advertisements with them. What’s the message? Who is the advertisement directed to? How do you try to attract the target audience?
- We will talk to the children about their dreams and how to achieve them. We will link economic savings in the present with the possibility of fulfilling some of our dreams in the future. For example, when referring to birthdays celebrated in class, we will talk about the gift of dreams and how we can fulfill it by keeping a few shekels each week in the savings fund.
- A school position is determined regarding any additional expenses required as an example: refreshments for events, holiday symbols, school supplies. For each expense, we will ask: Is it really required? Does it fit in with the economic messages we want to instill in children? Can’t we do without it?
Paamonim has a variety of financial education programs adapted to the various age groups – elementary, middle and secondary.
In addition, Paamonim holds activities during World Money Week, in March, and also offers activities for experiential peak days for parents and children – for Family Day, holidays or the summer vacation, such as freedom to download from the website.
