Parents get a lesson on the financial habits of children

If, like most parents, you believe children learn about money in school or from playing the board game Monopoly with their friends - think again. They start learning about money and developing lifelong financial habits at pre-school age by watching their parents, according to Paul Stefansson of ipac financial planning.

'When I was a little boy in Canada, I was told polite people never talked about four things: sex, politics, religion and money,' he said. 'Now we make jokes about the first two, but money is a very emotional thing. Because of that, we never teach our kids.'

Mr Stefansson, the company's regional director of corporate relations, is actively involved in the Kids & Money seminar programme held in ipac's Hong Kong and Singapore offices. The programme is being extended to international schools through parent-teacher associations to reach more parents with an important message - be a good financial role model.

'We do a lot of work with financial literacy. Even if you're financially literate, it doesn't impact on how much money you save. Intelligence and habit are two different things. So it's not just about being financially literate, it's about good habits and that's where role-modelling comes in,' he said. 'We try to help the parents be good role models, which involves the nasty B word - budget.'

The long-term implications for children who develop bad money habits include financial ones such as bankruptcy, emotional problems such as low self-esteem, and relationship issues. 'A lot of divorces are caused by bad money habits,' he said.

Paul Clitheroe, an ipac founder, has received about A$16 million ($95.2 million) from the Australian government to drive money education into the curriculum. In the US, where more people go bankrupt than graduate from university each year, according to a Harvard study, there is a similar programme called JumpStart.