Time well spent

Anika is only four, but she has already grasped the concepts of saving for a rainy day and charity. She has told her mother Susanna Tsoi Lin-yung that the HK$2 and HK$5 coins she regularly drops into her piggy bank will one day pay for things for her mother - or help someone in need.

It's a heart-warming thought and especially so in a world where running up debts and spending on credits cards seem to be the norm.

But then it is not surprising that Anika is showing good money habits at such an early age. Her mother is a certified public accountant and an ambassador on a scheme which aims to teach literacy skills to Hong Kong schoolchildren.

Tsoi is one of an army of 200 volunteers who go into schools as part of the Rich Kid, Poor Kid programme run by the Hong Kong Institute of Certified Public Accountants (HKICPA).

She believes it is a parent's duty to try to instil the correct concepts about money into the children and the early the better.

'Anika is still very young but I believe it is good to introduce the right concepts to her at an early age. She loves shopping but when we are out I will sometimes use the opportunity to try and explain money concepts,' says 40-year-old Tsoi.

'For example, if she says she wants something, I may explain that if someone wants to buy something, they need money and they have to work to earn it. I think she already has a rough understanding of the purpose of money.

'Everyone needs basic money skills for a successful, happy life. A lot of economists see the financial crisis as evidence of a lack of financial responsibility on the part of individuals.

'Parents play an influential role in teaching kids money concepts, and money skills and values. We are also the role models for our children, so we need to be consistent in our own attitudes towards money and the practices we preach to our kids.'

Tsoi is not alone in her opinions as a mother and a professional accountant, and there has been growing feeling among parents, educators and financial experts that understanding money - or financial literacy - should be taught to children as a crucial life skill.

According to a recent pan-Asia survey of 3,500 parents of children aged seven to 12 by life insurance and asset management specialist Prudential Corporation Asia, 94 per cent of Hong Kong parents believe it is important that children learn how to manage money, with 99 per cent saying they believe it is the parent's role to initiate these skills.

Of those surveyed, 80 per cent give children spending money, but only 13 per cent believe their children possess very good money management skills.

Although figures from the Prudential survey would appear to show parents here are already doing a relatively good job - with 74 per cent of children saving on average up to 61 per cent of their pocket money - other studies and experts have suggested that talking about money matters is not so easy for many parents.

According to Neale Godfrey, author of Money Still Doesn't Grow on Trees: A Parent's Guide to Raising Financial Responsible Teenagers and Young Adults, it's a subject some parents find harder to discuss with their children than sex.

A survey by the HKICPA in 2006 revealed that 37 per cent of 300 parents with children aged six to eight years old believed they were incapable of teaching them good money habits; 70 per cent thought they needed help.

Among families earning less than HK$10,000 per month, parent confidence was even lower, with 88 per cent doubting they could teach good money habits and 23 per cent saying they didn't understand money and finance themselves.

This is one of the main reasons the HKICPA set up its Rich Kid, Poor Kid programme. In its first six years, the scheme reached 50,000 students in 210 primary and secondary schools, through a road show and a children's book-set which tells the story of a young girl called May Moon who learns the value of money and how to manage it.

Banks have also taken up the cause, with HSBC teaching money skills in schools under its Living Finance education programme, with workshops for teenagers aged 14 to 17.

Citibank, a pioneer in this field, has instigated 15 different programmes in Hong Kong over the past decade that have reached more than 300,000 students, in its mission to educate future generations on financial management.

More recently, the insurance giant Prudential has gone one step further, using multimedia to promote financial skills with a specially-produced cartoon, Cha-Ching: Money Smart Kids currently being aired on Cartoon Network.

The programme features six characters in a band called Cha-Ching, named after the sound a cash register makes. The characters, who all have different ways of dealing with money, are the focus of 10 three-minute episodes.

It is backed up by an interactive website with games, online resources for parents and teachers, including lesson plans, and mobile applications for iPod and iPads to help children keep track of their money.

Barry Stowe, chief executive of Prudential Corporation Asia, says it decided to launch the programme after working with mothers and older high school children, seeing a need to round up financial literacy efforts to an even younger audience.

'Children in Asia are growing up in families with more disposable income than they had previously, and there is growing interest in and need for financial literacy skills for children,' Stowe says.

The programme was created with the guidance of Dr Alice Wilder, a child education expert and child psychologist known for her work in nurturing learning through play.

According to Wilder, the programme is an exciting and creative way of introducing the concept of money management to children, in ways which provide parents and teachers with the resources to start discussions.

'The really wonderful thing about having this multimedia platform is that it takes more abstract non-visible parts of the money process - earn, save and donate - and makes them visible,' she says.

'When children see this type of programming it is likely they will bring what they have seen and learned into real life.'

At the end of the day, however, it is still the parents who have the most power in shaping the money skills of future generations. With regards to learning, research has consistently shown that children do whatever was modelled to them by those closest to them, says Wilder, so the most important things parents should teach children is self control, and they should let them know that there is more than to money than just spending it.

'The earlier children start to learn about money, the better and easier it is for them to form good habits. It becomes harder to change as we get older.

'An average child can usually pick up something new within three presentations of it. With adults it takes at least 21 times,' she says.

'I read a piece in The Times quite recently in which the author wrote that self control, along with intelligence, are the greatest predictors of a successful life.

'This makes a lot of sense when applied to financial literacy as well. If we don't give kids the practice and the knowledge of how important it is to have that self control is, they're really going to struggle in life.

'That is not to say spending cannot be one of the choices we teach our children, but we also need to show them it is about balancing [those choices].'

13%

The percentage of parents who believe their children have good money management skills, according to a survey