Guided by the Financial Supervisory Commission, a “national A+ financial knowledge lecture train tour” has been jointly launched by municipal governments, institutions, colleges, universities, primary schools, the Bankers Association, Taiwan Academy of Banking and Finance (TABF), Financial Ombudsman Institution, and Taiwan Insurance Institute.

Financial literacy takes root from an early age

In order to pass financial literacy on to the younger generation, starting from Yilan, TABF will continue teaching elementary school children the basics of money. It is also working to strengthen the financial knowledge of college students, cultivate their financial literacy, and enhance their financial sense, realizing the vision of inclusive finance.

The first round of efforts has started from Shih Min and Masai elementary schools in Su’Ao Township, Yilan County. TABF’s financial literacy instruction comes at a time when elementary school students demonstrate less financial literacy and resilience than in the past. Wenche Hsueh, principal of Shih Min Elementary School, said that most children in non-urban areas do not have pocket money, and usually do not get experience spending money on a daily basis, so they don’t know how to use it. Children often have no concept of how much it costs to buy things, thinking that as long as they want something, they can ask their parents to buy it for them. Parents don’t give their kids pocket money until it’s suddenly time for field trips or graduation trips. But then, the child doesn't know how to use the money, so they end up spending it indiscriminately.

“This has always been the case, but I find that now is different. After the courses on money, saving and spending, the students known how to distinguish between needs and wants,” Hsueh says. Hote notes that sixth graders are going on a self-guided trip to Xiaoliuqiu this year. They started planning the entire itinerary half a year ago, including attractions, accommodations, transportation, and other arrangements. They didn’t realize their consumption behavior would change after attending the courses!

On the first day of the trip, the teachers and students set off from Su’Ao, took the train to Taipei, boarded the high-speed train to Zuoying Station, and then changed to a Taiwan Tourist Bus to Donggang Wharf to take a boat to Xiaoliuqiu. Along the way, they passed by many convenience stores and sales departments, but didn’t stop to buy anything.

In the past, students would make continuous impulsive purchases when they were traveling, but this time, they were happy without spending a dime. “Some of them mentioned the difference between wants and needs, allowing them to use money carefully," Hsueh said.

He added that children of different ages have different ideas. Both middle-schoolers and high-schoolers must constantly review the concepts of wants and needs. For example, children in lower grades may not be interested in smartphones, but those in higher grades may clamor to buy a phone when they see their classmates with one. This is when it becomes necessary to remind them of the difference between wants and needs.

Bookkeeping as the foundation of savings

The elementary school financial education textbooks planned and designed by TABF include three main points: money, saving, and spending. Teaching children about money, understanding that it is a two-way tool that can be used for both payments and purchases, helps them learn the four functions of money: saving, spending, sharing, and investing. In addition to distinguishing between wants and needs, children will also start to consider other points when buying things: where, when, and how to make a purchase, cost-effectiveness, and hidden costs like taxes and fees.

More importantly, with the use of bookkeeping, children can learn to keep accounts as the foundation of savings. “The children benefit a lot from this education. In addition to keeping accounts, they have also begun to learn how to save." Hsueh pointed out that savings must have a goal. Through their trip, they practice the value of bookkeeping and saving.

In the past, senior students never forged the habit of keeping accounts. After three months of financial literacy courses, the children mentioned in their daily diaries that they finally realized how hard it is for their parents to make money, and gradually developed bookkeeping habits. Some even asked for account books after the class on order to keep on with their efforts.

Hsueh said that the course is mainly for senior students, but middle-grade students can also start learning bookkeeping. In addition, even though children in non-metropolitan areas do not usually spend money, teachers still teach them that many things and items cost money and have a price. Although breakfast, a nutritious lunch, and air-conditioning, etc., or labor services and so on may not be directly paid in cash, they still cost money.

Financial education through graduation trips

Uniquely, in planning the trip, Shih Min Elementary School allows the children to learn how to raise their own travel expenses, rather than directly asking their parents for money. Teacher Yu-min Shen teaches children to learn “palms down, not palms up.” Therefore, when adults want to directly sponsor the travel expenses, the children almost always decline.

After the local village chief learned about this, he donated funds to sponsor the trip. The teacher and children began to discuss how to pay back and contribute to the village. In the end, they used their weekends and vacations to go to the village recycling station, and sorted through the recycled materials and cleaned up the community park with their grandparents, giving the children a closer relationship with their community while they took care of their elders.

Most schools make handmade cookies or small items, and then launch charity sales to raise funds, but Hsueh prefers that children can use their own talents to raise money. For example, every child in Shih Min can clog dance, a local tradition, which implies a concept of sharing and cooperation.

Children from Shih Min formed a dance team to participate in the clog dancing activity of the Songkran Festival held in Su’Ao Township this year. Su’Ao Shui Dangdang Women’s Club saw the children dancing earnestly. In order to encourage them, they donated the prize money from the performance to the team to support their graduation trip. In addition to the women’s association, Nanning Development Association also donated prize money. Previously, old ladies made tea eggs. This year, parents and children made biscuits and teachers made sandwiches.

In order to help the students raise funds for their trip, the teacher worked hard to help them find performance opportunities. The school also held a charity flea market, asking the children to sell second-hand items that were not needed at home. One child’s grandmother also made tea eggs for a charity sale. Teachers, students and parents all contributed to the charity sale in their own ways. Hsueh said that there are only about 80 students in the school, but the flea market raised more than NT$ 10,000. In addition, the children worked hard to save. “Unexpectedly, after the trip was finished, the teacher found that each child could be refunded NT$ 500, allowing them to experience the benefits of financial literacy through practical actions.”

“Our graduation trips and off-campus teaching activities allow children to truly feel the importance of financial education,” Hsueh said gratefully. The financial literacy courses planned by TABF helped improve the children’s education.

Risk resilience through financial education

In the future, the financial literacy curriculum will add credit and borrowing. Hsueh explained that children in middle and lower grades often borrow stationery, but some lack the concept that they should later return the items. Children in higher grades may borrow money, but they do not understand the relationship between lending and borrowing, which can cause disputes.

In fact, the concepts of lending and credit are not limited to the relationships with banks, but are often encountered in children’s daily lives. For example, older children see their parents using debit and credit cards, but they don't understand the difference between the two, so they often confuse them. Credit borrowing can be very convenient, but the interest rates are high. Hsueh said that in addition to understanding borrowing and lending, older children should also be introduced to the most popular electronic payment methods. “Transfer money directly through their phones, and it will disappear immediately. Because there is no physical currency, it’s easy for kids, and even adults, to lose touch with their finances.”

He further pointed out that these financial services are part of real life, but very little is taught in schools. Financial literacy education is required to increase children’s resistance to future risks. Therefore, he suggests designing micro courses, using off-campus teaching or graduation trips to impart knowledge of scenic spots, cultivating financial literacy, and building up risk resilience ahead of time.

“Learning by doing” in the remote villages of Zhongliao

En-te Hsu, a professor of accounting at Tunghai University, and Global Internship Facilitation of Taiwan (GIFT) use the method of “learning by doing” to allow college students to experience the power of financial literacy. Hsu often takes student volunteers to serve in Nantou Zhongliao Primary School. He said that children's financial literacy should be cultivated from an early age, not only imparting financial knowledge, but also teaching accounting methods. Even children with no pocket money have the ability to keep accounts and develop good bookkeeping habits.

Hsu said that the current generation has different opportunities than their forebears. In the past, it was not easy to go to university. Many students worked hard to raise money for tuition and living expenses. In 2022, college students are influenced by media, social media platforms and their peers. Their lives are no longer as simple as in the past; status and taste play a larger role than before.

The functions of phones, for instance, are contact and communication, but nowadays college students work part-time jobs so they can buy the latest iPhone, for travel expenses, and so they can afford the latest and most fashionable outfits. But we can’t just blame children for this consumption behavior. The times are changing. In the past, food and clothing were the most basic needs, but now it seems that wants are more important than needs. Therefore, educating children about the differences between the two will make them think about where their happiness and values lie.

Since younger primary school children are less likely to have active income, Hsu designed the bookkeeping content as the value generated when the children assist the teacher in collecting homework, sweeping the floor, and running errands, etc., which is then recorded as income. Expenses are incurred when buying breakfast or receiving labor services. He hopes that children learn that helping others creates value. After the whole year, their accounts are settled as tokens, which can be exchanged for equivalent items.

“This approach, used in conjunction with children’s real lives, helps train them to develop the habit of keeping accounts.” Hsu said that over time, children take the initiative to help others and learn how to distinguish external needs and values. In addition, children should also be taught to formulate goals and find where long-term social needs, personal resources and personal dreams intersect.

Hsu said that a mother once told him that there were visible changes in the college students after TABF implemented its financial education courses. They learned how to be grateful and give to others. Previously, they did not understand that receiving labor services can also be a kind of expenditure. When mothers provide food, clothing, housing and transportation, children feel accustomed to it and don’t care about it. They were shocked to realize the value and meaning behind each service.

When these people changed their minds, they redefined themselves and began to think about their contribution to society, pursuit of a happy life, impressions of financial happiness, and gratitude to those around them. This may not be an isolated case. We also hope that these skills which are not taught in textbooks can allow students to confidently plan their financial lives, and take stock of financial situations throughout their lives from a practical perspective, helping them begin to understand their own financial character and risk resilience to find their own way towards financial happiness.