May 30, 2010

***This article has been taken from the Sydney Morning Herald on 1st May 2011***

It is never too early to teach young people about money. In the first of a three-part series, Bina Brown discusses some lessons for small children.

WHEN your young child points to an automatic teller machine (ATM) and says ”that’s how you get your money”, you know it is time for some explanations.

The image may be one of an endless flow of money coming from a hole in the wall whenever it is needed. Children learn by example and unless someone tells them what is behind the ATM, how will they understand that people have to work for their money? 

Where and when to begin teaching is a difficult question but the chief executive of St George Bank, Greg Bartlett, suggests first thinking about your own attitude to money, which the child may be observing. Then there are issues around how a child should receive money, Bartlett says. Will it be pocket money? What do they have to do to get that money?

Whether you teach through talking, games or activities may depend on the child. The managing director of financial services provider KeyInvest, Ian Campbell, says parents looking for the best ways to teach their children about money can often refer back to their own childhood. ”The prudent savings strategies of past generations, particularly those who grew up in tougher economic times, can prove to be valuable lessons for today’s more impatient spenders,” he says. ”Grandparents or great grandparents who approached major life events and purchases with a proactive savings plan are great role models. However, along the savings path, it’s still very important to celebrate discretionary spending. A child will respond very well to making their own purchase from the money they have saved and that’s a great way to ingrain the benefits of saving.”

Lessons to learn

One of the worst examples you can give children is borrowing from their piggy bank.

”If parents are being seen by their children as irresponsible savers, where they are constantly running out of money and can’t budget effectively, this can have a negative impact on their kids,” says the chief executive of comparison website RateCity.com.au, Damian Smith. ”Teaching children about effective saving is really only done in practice not in theory.”

Smith was referring to a Bankwest survey showing one in three parents admitted to borrowing money from their children’s money boxes to pay for items from a loaf of bread to an airconditioner. Most parents (not all) paid back their children’s savings, according to the report.

The report also finds that almost half of the children surveyed who receive pocket money don’t save it. And of those who do, only 64 per cent use a bank account. Smith says children are missing out on interest because their parents have bad savings habits, which are being passed on to their children.

”The best, and by far the easiest, way to teach children how to save money is by opening a savings account,” Smith says. According to RateCity, the kids’ savings account paying the best interest rate is Westpac’s Kids Reward Saver at 6.2 per cent, followed by Suncorp’s Kids Savings Account at 5.5 per cent, the Victoria Teachers Credit Union’s First Saver at 4.9 per cent, ANZ’s Progress Saver for Kids at 4.76 per cent and the Commonwealth Bank’s Youthsaver Account at 4.51 per cent.

St George’s Bartlett says the most important lessons about money are similar regardless of the child’s age – what differs is how you communicate that message. So for the younger ones, parents might teach the first lesson, about the value of money, in terms of material goods and that when you go shopping things cost money.

Other lessons are: how money is earned by working; saving for short-term purchases by putting money in a jar and seeing it grow; spending money is fine but once it is spent it is gone; people borrow money but it must be paid back; and investing money helps it to grow, such as by earning interest.

The way these are demonstrated will vary depending on the child’s age.

Case study

In the virtual world of Coinland, avatar Caroline Shine, aka Emily Janes, 11, has earned $28 in virtual coins.

Under the guidance of Mr Save-a-lot, Caroline Shine looked for jobs in the Daily Coin newspaper, such as “Splash the Rabbit” or “Pizza Mayhem”. Her reward in virtual coins was for keeping the rabbits at bay or making pizzas. Then it was quickly off to the bank to make a deposit.

Already a good saver in real life, Emily learnt through the Commonwealth Bank’s interactive Coinland website (coinland.com.au) what happens when you put your money in the bank. “I know that each time you put your money in the bank you get more interest,” Emily says.

Pitched at primary school children aged five to 10 years, the idea is to create a personalised avatar that represents them in the game, alongside their guide Platy, who shows them how their actions impact their savings goals. The bank’s saving super heroes, the Dollarmites, interact with players to bring money management to life. They also meet Mr Save-a-lot, who teaches children about money, while Gobbler — Platy’s nemesis — entices them to spend.

Caroline Shine is yet to decide whether she will spend her virtual dollars on a new mobile phone, at the fun park or on a movie. In real life, Emily has already saved $300 of her own money to buy a Nintendo DSi game console and is now saving for her own laptop to “play games and Coinland”.

She would rather have her own computer than share the family computer with her two younger siblings, Claudia, 9, and Liam, 7, who are just starting to understand the benefits of saving. “Emily has always saved all her pocket and birthday money and the other two like to spend it as soon as they get it,” says mother Megan, also a good saver. “With the younger two, they are just starting to realise that if you save your money you can buy something bigger.”

The general manager of consumer marketing for Coinland, Mark Murray, says the game has been developed to build the financial literacy skills of children, creating a virtual world where they can have fun while building knowledge about money.

He says the underlying lessons are the importance of earning money, saving and setting savings goals. Children learn through challenges and games.

The WIGU program plans to incorporate many elements of the Montessori method into its curriculum. The Montessori method is an approach to educating children based on the research and experiences of Italian physician and educator, Maria Montessori (1870-1952). It focuses on a child’s “true normal activity” and “self-directed learning”. This method is particularly effective for real life skills education as it focuses on a child’s unique instincts and sensitivity to conditions in the environment.

As the director of WIGU Australia, I had the privilege of visiting Elonera Montessori School. In order to introduce elements of the Montessori method into traditional schools, a true understanding of the method and a hands on experience had to be gained. WIGU introduces elements of the Montessori method in a manner that doesn’t change the habits and ideals of a traditional school environment, but at the same time taking all the benefits children can gain from the method. Essentially, participants in the WIGU program are going to gain the benefits of both worlds.

Illustrated below are observations made at Elonera Montessori school. This summary will help you gain a better understanding of the Montessori method and how it differs from traditional methods of teaching.

• Deadlines – students get given a list of things to do for the day (similar to the idea of a to-do-list, which gives them the sense of personal satisfaction when they tick off an item one by one). Instead of teachers allocating a time slot for each subject and the order that each subject will be taught in, students have the flexibility to finish tasks in whatever order they choose. Each task has a set time frame so that students get a guideline of how long it should take them to complete a task. This concept contributes greatly to time management in the future.

• Different age groups work together – Montessori classes consist of varied ages. A typical stage 1 class will have students ranging from 3 years old to 5 years old. A typical stage 2 class will have students ranging from 6 years old to 9 years old. The older students act as role models for the younger students. This also benefits the older students as they can improve their skills through the act of “teaching”. This helps to reinforce ideas in their minds and also helps them gain leadership skills. The benefits for the younger children include: having a mentor constantly in their learning environment, having someone to imitate good behaviour from, respecting their own classmates and learning at a faster pace.

• Children work on domestic skills – children as young as the age of three are seen performing domestic duties such as sweeping the floors, doing the dishes, hanging up laundry, packing away toys they have played with, serving food, setting the table and wiping down bench tops. Teachers are there to guide them with the process. Obviously, their motor skills are less developed than older people and therefore they are less competent in performing the duties, however by performing these tasks on a regular basis, they improve their control of their motor skills at a much faster rate.

• By having a mixture of age groups in one class, there are no limits to the levels of skills both academically and mentally they can develop. At traditional schools, a certain level is defined for each grade and it is only when students are taken out for an enrichment class can they extend their skills and capabilities. A Montessori class doesn’t have these problems and challenges are presented to the students on a daily basis simply because they are mixed in with older students, working at a higher level.

• No reward system – students are brought up working for their own satisfaction. Montessori holds the belief that students should learn from a young age to work for themselves and for personal satisfaction. At a traditional school, students will find themselves completing a certain task in order to gain a reward, or not conducting inappropriate behaviour to avoid punishment. However, at a Montessori school, there is no reward system, which in turn provides a non-competitive learning environment. Rewards come from within and they know that they are doing well themselves, without seeking approval from an adult. Instead of a flood of compliments such as “Wow, that’s fantastic!” and “You’re doing unbelievably well!”, you will hear Montessori teachers saying, “Peter, are you proud of what you’ve achieved? (student answers yes) Well, you should be!” This encourages students to analyse their own behaviour and you will never see a child ‘fishing for compliments’.

• Statistics show that there is far less bullying, rebelling and signs of negative self esteem in Montessori schools because of two main factors; mixed age groups and inner self approval.

• There is a strong belief in Montessori schools that children should learn to socialise with different ages. This belief continues through to high school, where the gap between age groups becomes more evident. Parents and teachers will find that there are far less problems in terms of anti-social behaviour in high school, because these students have been brought up in an environment where difference in ages doesn’t matter. There is nothing there that defines that a particular age group must hang out together, as everyone of all ages is treated as equals.

• Both students and teachers at a Montessori school deal with each other on a first name basis. Students are expected to address their teacher by their first name, so that not one single individual will feel like they are inferior to another, no matter the role or the age. Everyone is treated as an equal and children are treated like adults. You will find that children mature much more quickly this way and assume responsibilities as an adult at a very early age.

• Students are taught the importance of eye contact and firm handshakes. This prepares for the outside world from an early age. When a teacher addresses a student, he/she is spoken to like an adult and in turn is expected to respond like an adult. If a student was to enter a Montessori school classroom, having come from a traditional school, they will actually find the people quite confronting. The reason for this is that traditional schools have a far more softer approach in terms of confrontation and student/teacher equality.

• Talk talk talk – students and teachers at Montessori schools talk a lot more than at traditional schools. When there is an issue to target, teachers will talk things through with a student instead of offering a reward or a punishment. The matter is “discussed” with the individual or as a class and a lot more talking and analysing takes place. It is a Montessori school’s belief that the student must understand the situation in depth before they can target it. That way, they will correct problems once and for all, because they truly understand where the problem lies.

• Students are not required to ask for permission in order to perform basic human needs (e.g. going to the toilet and having a drink of water) – these tasks are deemed as necessary and the students should be able to perform these tasks when their body tells them to do so. By not controlling students in this avenue, they don’t see these activities as out of the norm and therefore will only perform them when necessary. Whereas, in a traditional school, going to the toilet or having a drink is viewed as a privilege and therefore students will start seeing these activities as a want or a tempting distraction from normal classroom tasks.

• Reverse role play – role play is a common activity conducted in a Montessori classroom. Reverse role play is highly effective in the sense that it puts students in the shoes of others. It allows students to feel what others feel in certain scenarios. One example I was given was in the case of bullying. The entire class is invited to partake in a reverse role play session and the bully is asked to play with role of the victim. By playing the role, the bully quickly learns what it’s like to be in somebody else’s shoes. This fun and effective activity is performed even in the later years of high school. This method never decreases in effectiveness, no matter what age or level of schooling it may be.

• In the end, a child acts a certain way in life based on what environment they are used to. A child’s mind is a like a sponge and their actions will reflect what habits they have been taught at an early age. This is why this Montessori school has a strict rule of not accepting students that come in from traditional schools past the age of 7. The reason for this is that these students have been brought up in a different way and most of the times will find it extremely difficult to fit in with the rest of the school community.

As you have probably concluded, the Montessori method is not as simple as a subject that can be introduced into the traditional school system. It’s more of a belief system, an environment and a whole new perspective on bringing up kids. WIGU takes both the Montessori method and the current traditional school curriculum, moulds the two together and conducts a program on real life skills, that truly prepares your kids for the real world.

Tim Hawkes believes the year 10 School Certificate has become irrelevant. Instead of an exam at the end of year 10, students could prepare their personal resumé with the help of teachers. NSW is the only state to have exams at the end of year 10 and the NAPLAN tests in years 3, 5, 7 and 9 have rendered them excessive, he says.

Dr Hawkes said the time had come for an end to ”incessant need to be examined at the behest of centralised government bureaucracies”.

”There [has] to be a break from preparing students for exams in favour of preparing students for life. The time has come to devolve some of the responsibility of lesson content to schools and their communities,” Dr Hawkes said.

”Schools need to repossess their teaching and students their learning. We need to move beyond the low-trust model of centralised control and allow greater input and diversity at the local level.”

Dr Hawkes said that the state government’s decision to ”modernise” the School Certificate would not go far enough. Radical re-thinking was needed.

”Fifty per cent of the year 10 curriculum needs to be controlled by individual schools so they can customise their educational offering to meet the unique needs of the school community. In order to support these schools, there could be a central ‘bank’ of optional courses which could be downloaded if they were deemed appropriate. The principal, staff, parents and students should all have input into the decision-making about which courses to offer. There are many VET courses that are suitable and available right now.”

Dr Hawkes said a peripatetic pool of staff that was not tied to a school could deliver new subjects which could be offered at night, at weekends and online.

He said life-skills courses, covering financial literacy, domestic skills, health, the law and parenting should also be offered.

”The current lack of readiness in many students to take on the responsibilities of independent living is positively frightening.”

Christine Cawsey, the incoming president of the NSW Secondary Principals Council, said public school principals agreed the School Certificate examination was no longer necessary.

”Our position is that a student leaving at any time during year 10, 11 or 12, before the HSC, should be able to receive a Certificate of Secondary Education that reflects their achievement in whatever subjects they have studied and include a [testimonial],” she said.

* http://www.smh.com.au/national/education/time-to-scrap-school-certificate-says-kings-school-head-20100606-xn7z.html