Teaching our children about the value of money and finance is imperative -- not only to avoid the seemingly inevitable tantrums over impulse-buy toys at the supermarket -- but to prepare them to be responsible with their own money through their teen years and into adulthood.
We teach our children to read and write from a very early age and financial education is like an extension of maths. It's as simple as sending your kids off to school with lunchbox money and knowing that a sausage roll or a piece of sushi costs $3.50 and Mum gave you $5, so that means you've got $1.50 left to spend. It's so important that kids understand these concepts.
I reflect on this quite regularly. I have two-year-old twins and while they are not yet ready to learn about money, they are learning about books and numbers and that is the essential starting point for talking about finances.
While the basics are being taught in classrooms around Australia with great success, technology is evolving so quickly and our children are adapting to it so fast that teachers and parents need to pivot too. And I think we have found the next level when it comes to making learning about finances fun and engaging -- virtual reality.
Programs such as our initiative Start Smart, which educates 500,000 Australian children each year about all manner of financial topics, from differentiating a want from a need for younger students, to budgets, credit and debt in teenagers, are really effective ways to help children learn more about managing -- and respecting -- money.
It's the simple lessons that just come up in conversations you have with your children about what they want versus what they need on a daily basis. Have you ever seen parents at the supermarket in the queue? You walk past the chocolate counter on the way to the checkout and those kids are standing there for five minutes waiting for the groceries to go through and it doesn't stop, right? I want a chocolate, I want this, I want that.
Being able to have a conversation that says, well you may want it, but do you need it, and can you afford it? That's an important immediate lesson.
We know now from research that most kids have formed their money managing habits or at least concepts about money by the age of seven or eight, which is incredibly young. And they learn most of those from observing their parents and from other influences in their life. Parents are such an important part of the education process of any child on any topic. As parents, what we do is the informal component -- our schools do the formal part of learning, but we are very important to the encouragement and reinforcement of that learning. But findings released by the Australian Security And Investments Commission earlier this year showed only about one in six parents with children at home discuss finances with their kids.
Start Smart has now introduced a pilot program which uses virtual reality technology to address this shortfall by allowing kids in years 1 and 2 to learn to differentiate between a need and a want -- something necessary to diffuse the 'gimme gimme gimme' conversation at the checkout -- at home with their parents.
The children take home a storybook called Sammy the Space Koala, written by award-winning Australian children's author, Ursula Dubosarsky, and a virtual reality headset called The Teleporter. The parents download an app to their smartphone, which fits inside the headset. The parent and the child read about Sammy's adventures into space, and at three intervals during the story the child puts on the headset.
In each instance the child must differentiate between a need and a want, for instance Sammy gets into the spaceship and has to choose between things that she'd like to take into space and things she needs once she's there. So she needs a spacesuit -- she doesn't need her doll.
Virtual reality makes learning more fun, more interactive and more engaging -- and I've been told anecdotally by parents that they love to play it too! If kids can engage with something in a way in which they think it's a game, then they are learning both consciously and unconsciously.
There's no doubt that the kinds of things that kids want to spend money on has changed. When I was a kid it might have been a pushbike or a Walkman, and now kids want an iPad or a smartwatch.
But what has not changed is the need to educate our children about how to responsibly consider money and how and when to spend it -- and thinking in an innovative way and using virtual reality is simply another step on the path to educating our kids in the most engaging and compelling way.
Opportunity Initiatives is Commonwealth Bank's new corporate responsibility plan. It has been designed to drive positive, lasting change through education, innovation and good business practices. Start Smart virtual reality is an example of the Opportunity Initiatives in action, combining our strength in innovation with our support of education to deliver a fun and interactive financial learning experience for Aussie kids. Visit commbank.com.au/opportunityinitiatives to find out more.