Financial education: ensuring our kids are free to innovate

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Giving kids the freedom to innovate.

Giving kids the freedom to innovate.

In my Breaking poor money habits: bringing financial literacy to the classroom article, I discussed some of the implications of a financially illiterate society. We talked about the ramifications of an assumed financial education, and started exploring the idea of standardising this educational experience by bringing it into the classroom.

With such a discussional foundation laid, I’d like us to delve deeper into the transformative effects of a financial education in the way early insight can shape our appetite for risk, resulting in more innovators.

As adults we can often be viewed as steadfast and entrenched in our daily operations. A lot of us are the result of the system, or in some cases several systems, as we were passed from one educational institution to another. The output was a degree or two, a sound job, and a fulfilling, although rather risk averse life. For a lot of us, our lowered appetite for risk meant that our preferred jobs were ones that revolved around certainty. Certainty of income, both in increasing amount and regularity. Certainty around hours worked, input expected, and job title held.

This remains the preferable path for the majority to take when considering tertiary education and a career afterwards, and for sound historical reason. But there is another option. A path less trodden, and lined with uncertainty. This is the path of an innovator.

The innovator is someone who shapes the future through the introduction of new ideas, products or processes. An innovator walks to the beat of her own drum, and is often categorised as risk-loving. And with risk comes rewards. We all know that innovation is the key propellant to advancing forward, however this is not a trait embodied by majority. It is not a trait we nurture in our young, and it is not a trait that can be easily possessed by reading textbooks.

Innovation, or to innovate, is an innate sense that I believe lives within us all. Overtime layers of regulation and routine can bury it, but it is never more evident than in our youth. We see this as evident with children using Banqer (if you’re unfamiliar with Banqer, I would suggest reading my previous article). There is one aspect of Banqer in particular that brings out this trait, and that is the concept of company formation. When given the freedom to form their own companies, children as young as eight are engaging with the task and coming up with some extremely innovative ideas. Firstly, to elaborate more on how this plays out in the classroom; through Banqer students have a classroom currency which can be distributed amongst one another, and also by their teacher. Classroom chores can be transformed from mundane tasks into classroom jobs that students set up companies to manage. A really clear example of this is a ‘Jordy’s Chair Stacking Co.” This is a company set up to employee students to stack the chairs at the end of the school day. Prior to integrating Banqer this was a classroom chore, now it’s an employable job where students are earning Banqer dollars for completing the task. Often these are funded by the teacher, but in some instances children will transact with one another. A good example of this is the ‘Proofreading Company’ that we see popping up in several Banqer classrooms.

Chair stacking and proofreading is nice, but we can’t really tag them as innovative. There are however a long list of less traditional offerings we see starting up in Banqer classrooms. From one particular Christchurch based classroom alone we saw ‘The GPC’, or ‘The Gaming Prevention Company’ whose employees monitor the productivity of their peers whilst using their classroom devices. ‘The M Company’ have built up a reputation around setting a calm and self-reflective classroom environment through playing relaxing music in the class at certain times. And ‘The Media Crew’ are your on-call event photographer and videographer who also produce high quality videos and stock images for other companies in the class. All of these ideas were thought of, applied for, and executed by the children themselves. All because they were afforded the opportunity to be innovative.

If innovation is present in all of us then a sound financial education is what can be used to nurture and foster it. Innovation needs to be recognised, practiced and allowed room to breath. A financial education is both informative, and a way of exploring new concepts. Personal finances need to be contextualised and brought to life to make them relevant. The way in which innovation is cultivated through financial education is by affording students the opportunity to exercise it, and to tolerate risk exposure.

Innovation is often risky business, and thrives in a risk seeking environment. Too much risk reduction and innovation will die out. If we can ensure our children a sound environment in which to innovate, potentially fail, understand the consequences of what occurred, and then have them trying again, then we’re winning. We are building little innovators who don’t shy away from risk. That can stand in the face of risk and see it as opportunity. By opening up their minds to the possibilities before them, beyond butcher, baker, and organic candlestick maker, we will encourage an explorative mindset and extremely rewarding behaviours.

The fact that the average and median age of founders when they started their current companies is 40 says a lot about our risk intolerance. It screams that not enough of our younger generation are willing to take a calculated leap of faith into shaping the future. Only once we are established and perhaps more experienced do we feel we are in a position to add our mark to the world. This needs to change.

Although a fictitious annual income of $75,000 from a successful classroom ‘Roll Call Company’ scheme isn’t reason to retire, it is opening up a possibility for one 11 year old. He has made a business plan, he has marketed, executed, managed staff and cash flow. He has seen the possibilities and knows that perhaps the path less travelled is one he would like to take. It is this aspect of financial education that excites me the most. This has the potential to not only transform one child’s life, but many. It has the potential to change our entire society if we choose.

I feel extremely privileged that I get to bring this kind of an education into classrooms everywhere. Although this aspirational thinking is what excites me most, at the coalface we are seeing exactly how a financial education aligns with the realities children and their families are facing. In my next post I’d like to explore how discussing property ownership with children is vital, and the unique perspective they can offer in that conversation.

Kendall Flutey, Banqer

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Read Kendall’s previous article Breaking poor money habits: bringing financial literacy to the classroom.

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