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Relief for an economist mother's anxiety

I’m a mother of two school-aged children and a graduate economist working at a major bank. My husband also works in the financial sector. This gives me a strong sense of responsibility, and some pressure, that our children should have good financial skills. They should be the kind of people who weigh their every purchase rationally, put money aside in savings, follow stock prices, and consider the environmental effect of it all.

But not everything goes the way you have planned and hoped. Time and again I have had to accept that “mom’s financial advice” isn’t always quite picked up. And even if the kids do listen, it doesn’t always translate into sensible decisions later. A child’s individual temperament seems to affect even their financial behaviour. The younger one needs to be encouraged that it’s okay to sometimes spend some of the saved money, while the older one immediately forgets all determination about saving once we get to the shops.

The OECD’s 2018 Programme for International Student Assessment (PISA) included an optional domain on financial literacy for 15-year-olds. This was the first time Finland took part in the domain – and with superb results. The young Finns placed second after Estonia, which means their financial literacy is excellent, in international comparison at least. For me, Finland’s excellent scores were both a relief and food for thought.

The PISA study notes that parents, guardians and other adult relations are the most common source of financial learning. Compared to other OECD countries, however, Finns were far above average in how many of them get financial literacy information from their teachers. The teaching is also apparently effective: out of all countries, Finland had the strongest correlation between teaching and the student’s level of financial knowledge. It seems that introducing financial literacy in schools is bearing fruit.

I was happy to hear this, after there has been so much discussion on whether financial skills are being taught sufficiently or at all in Finland. There is always room for improvement of course, but now we have the results to prove that the current situation is not so bad after all. Parents can, in good conscience, share the responsibility of their children’s financial literacy with the school, which is a relief. It was also good news that differences between schools were small – in other words, my kids at their small rural school will probably be taught as professionally as the children in bigger cities are. 

Other factors besides teaching do come in play, however. One of the most important ones is the parents’ socioeconomic background. The schools cannot even out all the differences in skills and behaviour learnt at home. As also noted in the PISA report, several studies have asserted that parents are an important, if not the most important, source of information when young people start learning how to manage money. Parents therefore can’t just offload all responsibility to the schools. So, I have to continue the economic education of my kids also at home, even if it isn’t always the most rewarding aspect of parenthood.

Curiously, the two highest-scoring countries in the study, Estonia and Finland, had the least active parents when it comes to financial education. The most active ones were in Bulgaria, Brazil and Lithuania. At first thought this seems contradictory. Should I participate more or less?

In reality, financial skills and behaviour develop through a complex combination of individual characteristics and the lessons learnt from home, school, friends, banks, and many other places. In my understanding it’s good for the child to also make some financial decisions independently, even if observing from the sidelines may sometimes feel less than great. Finnish children are, in fact, more independent in their use of money when compared with other countries. For example, they more often have their own banking accounts and payment cards, which correlate with better financial literacy.

Gender does not seem to make much difference in financial skills in Finland. Interestingly, the topics of discussion do differ, however; girls and their parents talk about spending decisions more often, while boys and their parents talk about economic and financial market news more often. This gave me a pause. Do I also talk about money differently with my daughter than I do with my son? I must admit this has happened at least occasionally. Since my daughter is a much more active spender, purchases have been a natural topic to talk about, but it may have led into us discussing money more frequently than with her brother, who is thrifty by nature.

In my opinion, the PISA results show that young Finns are in a good position to grow up into financially responsible adults. Finnish schools have good standards in teaching financial literacy, and the pupils are actively involved with their own bank accounts and cards. But the home environment plays an important role too, in attitudes and role models and knowledge shared. For me, some of the most important (and sometimes painful) lessons about money and spending have taken place when I’ve had to ponder and justify my own decisions and attitudes as I’m passing them on. When you encourage kids to think about these things, they can then conveniently question their parents in turn. But that’s what having children is like: it’s all about mutual learning. 

This column is part of a series where Finance Finland member companies talk about responsibility in the financial sector. 




 Author

​Henna Mikkonen

Head of Macro Analysis at
Savings Banks Group

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