Learning about money and finance 2. What is Financial Capability? 2 Why financial education is important 2 Our world today 2

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1 Parents section Contents: Learning about money and finance 2 What is Financial Capability? 2 Why financial education is important 2 Our world today 2 The pupils Financial Capability programmes content 3 The Interactive Activities for 4 to 7 year olds 4 The Interactive Games for 7 to 11 year olds 5 Practical Activities and Quizzes for 4 to 11 year olds 6 Tips to help at home: 7 Know the Facts: Child Trust Fund 7 Know the Facts: Building Societies and Banks 7 Know the Facts: Why Budget? 8 Help your kids to be money smart! 9 Things to discuss together 10 Word Bank for 4-7 year olds 11 Glossary for 7-11 year olds 12 Financial Capability

2 Learning about money and finance What is Financial Capability? The second that anyone, of any age, has money of their own, they can and should start planning how best to use it in order to get what they most want. This even applies to a five year old given a few pence as pocket money. Jonathan Self, author of Teenagers Guide to Money, At school your child will be working on a financial capability programme. It is basically learning how to be sensible with money, understanding it and how to look after it. It s a life skill worth learning early. Why financial education is so important We use maths, numbers and money everyday of our lives, often without realising it. We check out prices of things in the shops, work out which coins to pay with and check the change we re given we need to see that bills we receive are correct and that we actually have enough money to pay for them. Also, if there is something we really want but can t afford straight away, we have to save for it! It s important that children are aware of all the financial things that affect them everyday. You can help by pointing out things in your daily activities such as practising counting and estimating and making simple lists, tables and charts. It doesn t have to be boring - you can make numbers, counting and money exciting by singing counting songs, chanting out tables, counting things like rope skips, ball bounces, peas or chips on a plate, cups in a cupboard, taking them out shopping with you, comparing prices of things in shops, adding and sorting coins, counting out money to pay and then counting out the change given. Our world today Our world today is no longer just cash-based, credit cards, debit cards and internet shopping make it all the easier for young people to lose track of their spending. Too many people are in debt, owing large amounts of money that they find difficult to pay back. Most of us have had to learn by our own mistakes when it comes to finances, but if we give children an early understanding of money and a responsible attitude towards it, we can help them avoid making mistakes and help them to learn how to plan. It s about developing a sensible approach to saving and spending. The population is growing and we are also living longer and need more than ever to plan for our future. Eventually, learning about global finance will also help children to become more responsible and ethical world citizens. Later in this section we have provided you with background information and explanations of terminology, but also a range of suggestions for a variety of financial things to talk about and do with your children. Financial Capability 2

3 Programme content For 4 to 7 year olds: Interactive story book: Rena and Jay Three story chapters: - Chapter 1: At the Library - Chapter 2: At Home - Chapter 3: At the Pet Shop Three small interactive games: - Missing Words - Coin Game - Wordsearch Interactive story book: Rena and Jay Volume 2 Three story chapters: - Chapter 1: At Home with Black Bandit - Chapter 2: Chores around the House - Chapter 3: Back to the Pet Shop Money Quiz Piggy Bank Fact sheets Money Facts: - What Makes up? - Money Smart Tips - Word Bank Work sheets Counting Money - Look Carefully x 2 - Counting Money - Money Maths - Matching Values - Coin Counting Final Quiz For 7 to 11 year olds: Interactive board game with sub-games: 'Money Wiz' Games: - Bargain Basement - Price Match - Quick Change - Supermarket Shopper Chance: - Lose or gain Skills: - Deposit - Reading accounts - Budget sheet Quiz: - 20 multiple choice questions Chore Chart Fact sheets - Family Budget - Money Facts - How a Coin is Made - Knowing Money - Money Sayings - Money Tips Work sheets Final Quiz Glossary - Money Sayings - Money Maths - Victorian Money Challenge - Pocket Money Financial Capability 3

4 The Interactive Activities for 4-7 year olds 'Rena and Jay' story books There are two interactive story books Rena and Jay (in which two children save to buy a new pet) and Rena and Jay Volume 2 (in which they look after their pet). Both books are fun activities where pages can be turned and read out aloud. You can also choose to play the narration, which synchronises with highlighted words. Please note, there is an accessible version, which enables visually impaired users to use the story book. This can be accessed via the accessibility link on the site. Aim: To introduce basic understanding of saving, budgeting and costs in a fun and engaging way, whilst enabling literacy development at two levels. Methodology: All of the controls are at the base to allow young children to reach on interactive whiteboards. If you are using a personal computer please use a mouse as normal. Click on the story button to access the story. Click on the easy button to access the simpler sentence version. Use the contents button to show the contents page with chapters and games. Use the play button to have the story read out aloud, with synchronised words highlighting. Use the pause button to select individual words for discussion. Select 1, 2 or 3 to go to Chapters 1, 2 or 3 Use the stop button to stop the story being read out aloud. Use the arrow keys on the far right of the screen to turn pages forwards or backwards. Games: Each of these games can be found in the contents page of the Rena and Jay story book. Missing Words: This activity links into chapter one of the story book. By using your mouse, if you are using a PC, select the correct word to fill in the missing blank space in the story. Incorrect words will automatically bounce back again. Coin Game: There are six activities in this game. Each page shows a selection of money sums with missing coins. Again, using your mouse if you are using a PC, click and drag the correct coin into each sum. If any are wrong, the coins will automatically bounce back. As each is successfully completed the next game appears. Wordsearch: There are two activities in this game. A selection of financial terms are given on the right. Using a mouse on a PC, click on each letter in turn (in the grid on the left) to spell out each word. Once correct, the word will be read out aloud and its meaning explained simply. Money Quiz: There are 20 questions in this interactive quiz. Each page shows a question with three possible answers related to financial terminology. Using either a mouse on a PC or the track pad, click on the letter next to the answer you think is correct. If you get the question wrong, you are given more chances until you get it right. Once the correct answer has been selected it, will be read out. Financial Capability 4

5 Provided by Parents COUNTING ON MONEY / THE COST OF MONEY 4-11 The Interactive Games for 7 11 year olds Money Wiz is an engaging board game where pupils build up their savings, whilst playing money games and answering questions. Alternatively, you can access the cards without playing the board game by clicking Quick cards. This enables you to try all of the Games, Skills, Chance and Quiz cards without rolling the die. Aim: To build and test children s knowledge and skills in a range of financial competencies through fun activities. Methodology: The game can be played by teams, pairs or individuals by clicking on the single - or double counter icon on the right. Once selected, the counter places itself on the board. The player clicks on the die and moves the number of places shown (in any direction) using a mouse if you are using a PC. The player lands on one of four symbols: S Skills, Q Quiz,? Chance, G Games The appropriate card turns over and instructs the player on what to do. If successful at the game, or correct in the answer, the player will win the money shown on the card. The coins are deposited under the counter and each is worth 50. The game ends when a player makes 1,000. Skills cards: There are 26 scenarios which build and test financial skills. The player clicks on the correct answer from the multiple choices, and, if correct, wins the amount shown. If incorrect, they will get an OOPS and win nothing. Quiz cards: There are 20 quiz questions ranging from simple to complex, with multiple choice answers. If incorrect, they will get an OOPS and win nothing. Chance cards: Here, different situations are explained and through chance they may lose or gain money. Explanations are given as tips as to how they can avoid these situations happening in real life. Games cards Each of these are mini sub-interactive games in themselves. There are several variations in all four games. BISCUITS BISCUITS BISCUITS BISCUITS 50p p What 3 items can you buy for 2.55? Your basket Money spent Track pad Bargain Basement: These show a range of different offers on selected goods. Choose the correct item to answer the question. Price Match: The conveyor belt has different items moving along it, from houses to tennis rackets or footballs. Click and match the estimated price to the item. Quick Change: Here you need to try to beat the clock. As each small grocery item appears, the price is shown at the till. Click on the notes and coins to count out the correct change for the money given. Supermarket Shopper: Here 850 players are shown a range of grocery items and their cost. They need to choose the three items that add up to the total they have to spend, without going over! Financial Capability 5

6 Practical Activities for 4-7 and 7-11 year old The 'Counting on Money' and 'The Cost of Money' programmes each have a simple practical activity for your child/ren to complete. The 4-7 Piggy Bank activity requires players to work out the total value of the coins shown, and then drag and drop equal amounts into two piggy banks. The 7-11 Chore Chart activity tasks players with filling in an interactive chore chart in order to earn enough money to buy a new DVD during Saturday s shopping trip. Both activities can be played at school on an interactive whiteboard, or at home on an individual PC. Final Quizzes for 4-7 and 7-11 year olds The 'Counting on Money' and 'The Cost of Money' programmes each have an end-of-module quiz for your child/ren to complete. Both quizzes cover three main topic areas: financial understanding, competence and responsibility. The 4-7 Quiz includes ten questions with players needing to answer five correctly in order to earn a certificate. The 7-11 Quiz includes twelve questions with players needing to answer six questions correctly in order to earn a certificate. Both quizzes can be played at school on an interactive whiteboard, or at home on an individual PC. Why not try it today with your child/ren? Financial Capability 6

7 Tips to help at home Know the Facts: Child Trust Fund This is all about your child s future. Every newborn child, born between 1st September 2002 and 2nd August 2010 was entitled to receive a voucher worth 250 from the Government, when the parents registered for Child Benefit. From the 3rd August 2010, this was reduced to 50 The voucher has to be used to open a tax-free account called a Child Trust Fund (CTF). This account belongs to the child and can t be touched until they turn 18, so that they have some money behind them to start adult life. Through the years you and friends and family can put more into it. It could be used for further or vocational education, to fund a gap year, to buy a car or even put a deposit on a house or flat or start their own business. Your children will see the example you have set and start to realise the value of saving. Understanding financial planning is an important life skill to learn. So, if your child has a CTF, use it wisely to save for his/her future. If your children are too old to qualify, you can still save for them in a special savings account. Know the Facts: Building Societies and Banks Here are some simple ways to explain about banking to your children. What does having an account mean? It keeps money safe (so it won t get stolen or lost). It lets you get your money out when you need it, from branches or cash machines. It can pay your usual bills regularly. It lets you pay for things over the phone, on the internet, or in person. It lets you manage your money by keeping track of everything. It can sometimes lend you money (but it has to be paid back). It can give interest on savings, therefore making your money grow. You may get these services in return: A chequebook (for you to make payments by cheque). A cheque guarantee card (this gives you cash, up to an agreed amount, and is a safeguard for the cheque). A cash card (allowing you to get cash 24 hours a day from a cash machine). A direct debit facility (paying bills automatically). A standing order facility (paying any regular bills). Monthly statements (telling you all the transactions you ve made on your account). Overdraft facilities (which allow you to borrow more money than you have in your account). Telephone and online banking (so you don t have to personally go into the building society or bank, but can carry out transactions by phone or computer). Financial Capability 7

8 Know the Facts: Why Budget? Managing money is an important life skill. A good way for your children to get started is to learn how to budget: planning for what comes in and what is needed to pay out. When your child has a basic understanding of money, you can make budget sheets (on paper or on a computer spread sheet) and it s easy to show your child how to do one. Together, collect all the building society, bank or credit card statements (if you can get at least two to three months, that would be great). - Here, you can explain all the money that comes in (wages, gifts, interest, etc) and all the standing orders, direct debits and cheque payments that go out. (N.B. If you find it difficult to explain, have a look at the glossary, which will help you explain the terminology.) Then collect all of your receipts (the last two to three months to compare, if possible). Try to explain: - Which are receipts for food, clothes, treats, unexpected bills, etc. - That necessities are food, clothes, heat, light and shelter. The other items are extras, when there are sufficient funds. Look at the budget sheet sample (on the fact sheet in the pupils section). Help your children make the budget plan by listing all payments in during one month and then on the opposite column all payments out. (Explain that the three months' total for each item can be added, then divide by three to get the average monthly cost.) If you have withdrawn cash, get these receipts together to tally with the statements. Be careful about double-counting cash machine receipts if you ve withdrawn cash, (you have probably spent it on bits and bobs with no receipts, so it needs to go as an expenditure) you might have bought things for which you already have receipts. Don t frighten yourself or your children by counting this twice and leaving you with a big overspend. Don t under-estimate what you need to spend each month. Always guess a larger, not smaller, amount. That way, you will always have cash left over (and not overspend). You need to divide any payments you make quarterly, or annually, to get an average monthly amount. It will help your children to understand that there is a limit to what you, their parents, can pay for and that everyone has to play their part in keeping the family wise about money. Financial Capability 8

9 Help your kids to be money smart! At home: Make sure they recognise different coins, and can add in 2 s, 5 s, 10 s, and 20 s. Play counting games. Play shops. Encourage your children to understand that money has to be earned and that money is then used to buy things. Show them what bills you have, help them understand invoices and receipts for things. If they get pocket money or birthday gifts of money, encourage them to save for something special (or even a rainy day ) rather than spending all their money on the first thing that takes their fancy. Give your children the opportunity to earn money themselves. They could help with daily chores: washing up, making the bed, gardening or for older children, washing the car. Make sure they keep a record of their money what they earn or are given and keep it safe in a money box, piggy bank, or better still, open a savings account for them. Show them the types of bills received regularly at home. Talk through the type of payments made. Help them to understand how to keep records and the importance of checking statements. Out and about: Take your children shopping at the supermarket, as this can be particularly educational. Look at how much each item costs, showing that well-known brands can be dearer than the shops 'own' brands. Point out bargains and look for discounts. Have your children take a calculator along and add up each item as you go around. When shopping, have your children hand over the actual money (if paying by cash) and check the change. If paying by credit card, explain what you re doing. Be aware of tricks such as supermarkets putting tempting sweets at the till. Get books and DVDs from the library rather than buying them. Help them understand that money isn t everything but it can make life easier, so they should treat it carefully. Always set a good example yourself by showing that you plan, budget, spend carefully and save. Financial Capability 9

10 Things to discuss together There is a wealth of things you can talk about with your child. Each time you discuss money with them it helps build their understanding. We have suggested a few areas ideas, but obviously when your child is ready for the information: Pocket money Not all families can afford, or think it right to give pocket money to their children. Whatever your situation, talk it through with your child / children. Help them understand how family finances are. If they get pocket money, make sure they understand that they have to budget; spend some and save some. Savings Borrowing money Necessities Salaries Interest Worth Pension Taxes Value for money Fundraising Waste Why these are so important, to understand the value of saving for something special / keeping it safe in a piggy bank or savings account / saving for emergency things or for a rainy day. That it s best to try and avoid it, but understanding sometimes that it s necessary. If they borrow from friends and family it means they should always pay it back as soon as possible. If they borrow from building societies, banks etc. explain how they would have to pay money back with interest, but over an agreed time period. That these things are things in life that we need in order to survive food, water, shelter, clothing but things that are pleasures or luxuries like going to the cinema, holidays, toys, sweets etc., are not. That these are regular payments of money earnt by people working; that different qualifications lead to different jobs and careers and that salaries can vary greatly. Look in local papers or job centres to see the sorts of salaries and compare these to famous movie stars, singers, footballers etc. That it s the money earnt on savings (money paid into an account as well as the interest left in); that interest is also charged on borrowed money so more money has to be paid back than is actually borrowed. That all money is valuable, however small an amount. Talk about what 1, 10, 100, 1,000 would buy in the UK and what those amounts would be worth in a country such as Africa. That this is the money paid to a person once they retire and aren t working anymore or receiving a salary; that Government gives tax relief on savings put towards a pension; that money saved in a pension is locked away until you ve reached retirement age. That your earnings always have taxes taken off to pay for things like police, roads, rubbish collection, schools etc. That often we are tempted to get something just because it has a label or a brand and that we should all make sure we get something that is needed, worthwhile, good quality and a good amount. That doing something to earn money for charities, or the less able, is a compassionate and caring thing rather than always thinking about oneself. That waste is really throwing money away buying more than you need, leaving lights on and other electrical items on puts bills up, throwing something away that could be re-used. Remember recycle re-use. Financial Capability 10

11 Word Bank for 4 to 7 year olds Account Afford Bank Bandit Bill Borrow Budget Building society Buy Cash Cashier Change Cheap Cheque Coin Cost Count Credit card Currency Earn Expensive Finance Money Notes Pay Pocket money Piggy bank Responsible Savings Spend Steal Value Money that you keep in a building society or bank. Have enough money to pay for something. Where you can keep your money safe in an account. Someone who steals money. A piece of paper showing how much is owed for something. When you ask for money from someone or a bank or building society but you only have it for a short time then you need to pay it back. Make a plan for spending how much and when. Another place, like a bank where you can keep your money safe in an account. Giving money for something so it becomes yours. Another word for money coins and notes. Someone whose job it is to take in and pay out money e.g. in a bank. Money that you have in the form of coins. Something that doesn t cost a lot of money. A special piece of paper that you write on and use to pay for things. A piece of metal money. The amount of money you need to pay for something. When you work out the total of something. A small plastic card used instead of coins or notes to pay for things. The name for money used in different countries. To be paid money for working. Something that costs a lot of money. To do with money. Coins or notes used to buy things. Pieces of paper money e.g. 5, 10, 50 notes. Giving money for something you want. Money that you may get to buy small things like books or treats. A pig shaped box, tin or pottery where you can keep your money when you are saving. When you are trusted to do your job or your duty when it s up to you to do it. Money that you get then keep to use for something special in the future. Use money to buy things. To take something that doesn t belong to you. The amount something is worth. Financial Capability 11

12 Money Glossary for 7 to 11 year olds Account Asset Balance Bank Banknote Bank (or building society) statement Bankrupt Bill Block capitals Borrower Bounced Cheque Budget Building society Capital Cheque Cheque guarantee card Council tax Credit card Currency Debit Debit card Debt Deposit Money that is kept in a building society or a bank. Keeping money in an account keeps it safe and it can make extra money called interest. Anything that is valuable something that is useful or earns money. This means the amount of money you have in a building society or bank account. A business that looks after your money. It also lends money. A piece of paper money where the bank promises to pay the amount of money shown on the note. A form that shows all the money that has been paid into your account and all the payments taken out. They are usually sent each month. When a person or a business is not able to pay back all the money they owe. A document (piece of paper) that shows how much money is owed for something. Clear separate capital letters often needed when filling out forms. Someone who needs to get money from a building society or bank to use but it has to be paid or given back later. When a bank refuses to pay the person named on a cheque for the amount shown, because there isn t enough money in the account. A plan of how much money can be spent on different things in an amount of time. A financial organisation, similar to a bank where you can save your money or borrow money. The money that you have that can be put into savings, property or investments, where it can make more money. A printed piece of paper used for payments. Instead of using coins or paper money, this form uses the money kept in a bank account. A personal plastic card (like a credit card) that is used with a cheque to make sure you are the cheque owner and have money in your account. A tax paid to the local council for its services (for example, looking after parks, roads, libraries and collecting rubbish). A small plastic card used instead of coins or paper money to buy things. You buy, then pay for them later when your credit card statement comes at the end of the month. Another word for money but used to describe the money used in particular countries. In the UK, our currency is in pounds and pence. Money taken out of an account. A small plastic card used instead of coins or paper money to buy things. You can only spend the amount that you have in your account. Money that you owe to someone else. Money that you pay into an account, or when you pay a deposit for something you are buying, you pay a percentage of the total amount. Financial Capability 12

13 Deposit slip Direct debit Discount Earn Employee Expenses Expenditure Financial Financial capability Financial records Fraud Gross Hire purchase Income Inflation Instalment Insurance Interest Interest rate Internet banking Invest Loan Lump sum Minimum payment Mortgage Net A special form that shows your building society or bank how much money you are paying into your account. An agreement with your building society or bank to pay regular bills from your account. The amount is not set but can alter from bill to bill. An offer where some money is taken off the total cost to make it cheaper to buy. To get money in return for doing work. Someone who works for an organisation, company or other person and is paid for their work. The sums of money that you need to have and to spend so that you can live. The amount of money that has been spent on goods and services. Things to do with money. Being able to manage your money well. Papers (documents) that keep all the information about money earned, spent or owed. A crime where people have tricked or lied to others to get money. The total amount of money before anything like taxes or payments has been taken out. A way of buying something but instead of paying it all at once, you pay a small part of the total cost and get to use the item whilst paying the remainder over a period of time. There is usually extra interest charged so the item will cost more in the end. The amount of money you earn or you receive as gifts. When prices and wages go up or increase. When the total amount you owe, divided into small parts and paid over an agreed period of time. Where you pay money to a company so they will pay you for the cost of something if it is lost, stolen or damaged in the future. The extra money that is paid to you by a building society or a bank, when you save your money with them. Or the extra money you have to pay back when you have borrowed money. The amount that you make on things is showed by a percentage of the whole amount. When you can bank online through your computer instead of going to the actual building society or bank. When you put money into a building society or bank, so you can make more money. Money that is lent to someone else or you borrow, but it has to be paid back (often with interest). A one off payment. The smallest amount that you have to pay on hire purchase or credit card payments. A loan from a building society or a bank when someone wants to buy a house of flat. The amount of money left when you ve taken out all your taxes and expenses. Financial Capability 13

14 Overdraft PAYE Pay As You Earn Payee Paying in book Pension PIN Profit & loss Rent Repayments Retail price Savings account Social security benefit Sort code Standing order Store card Tax Telephone banking Tenant Transfer Transaction Utility bills Withdrawal An amount of money that a building society or bank lets you borrow, in case you spend more money than you have. The borrowed money is usually charged extra for. Where the tax you owe to the Government is taken off your wage before you get it. The person, organisation or company that receives the money when you pay them by cheque. The book of deposit slips that you fill in when paying in money or cheques into your account. The amount of money paid regularly to you when you have retired from work. The Government pay a part of this but the rest comes from money put aside from your wages throughout your working life. A code of four numbers that you type in when you use a credit card in a shop or restaurant. (You must make sure you remember it, but don t share it with anyone else). Money made or lost by a person or business. An amount of money paid to an owner of a house or land so you can live or work in their property. The amounts of money you need to pay weekly or monthly until all the money you borrowed is paid back (and often with interest added). How much money goods or services are sold for. Businesses make money by buying at a lower cost price and selling for a higher retail price. An account with a building society or a bank in which you save money and make more with the interest Payments by the government to people who are unemployed or unable to work A six-digit number that identifies the branch of a building society or bank. It is usually seen in the top right hand corner of a cheque. An agreement with your building society or bank to make regular payments of a set amount of money from your account to another person or company. A card that is similar to a credit card but is given by a store to be used to buy things in that store only, using borrowed money. Money paid to the Government to run the country with services like education, the military and the health service. Carrying out banking over the phone, instead of going into a building society or bank. Someone who rents the place where they live or work. Moving money from one account to another. A payment made from one person to another. Bills for using the telephone, water, electricity and gas. Money taken out of your account. Financial Capability 14