Mara Harvey

Author Archives: Mara Harvey

February 10, 2020

Why An Allowance Is The Best Tool For Financial Education

Marty receiving allowance

As parents, we often wrestle with the idea of giving money to our children. Two opposing thoughts often come to play when we are dealing with giving children an allowance.

  • First is that: I want to make sure that my child will never feel lacking and that everything he/she needs is taken care of.
  • The second is that: I don’t want my child to grow up spoiled and not knowing the value of money.

These are both very valid ideas.

We want our children to have their needs met and some of their wants given. But at the same time, we want them to know that money is something that we work hard for and is something that is not given.

In A Smart Way To Start, I always advocate for financial literacy and responsibility, and I believe that one of the best ways to do that is to give your kids an allowance. It might sound counter intuitive, but an allowance will teach your kids a lot about money management.

What are the benefits of giving your kids an allowance?

It's our responsibility to provide our kids with proper financial education -- 91% of parents think so according to a Credit Suisse Pocket Money Study. Giving your kids an allowance will teach them to be responsible with their money. If you give them a reasonable (and age appropriate) amount of money, they will learn more about money and its value through practical experience.

How so?

An allowance is a fixed amount of money that we give to children on a regular basis. What they do with it is up to them. They can use it to buy toys or treats or save it for the future.

What's important to remember is this: The more we let kids have the freedom to spend their money, the more ownership they will take and learn to have for their financial actions. They will learn that once they spend their money it is gone forever. It makes them realise that either need to: save up for things that matter or spend only on things they need.

Guidelines to remember:

We want them to make sure our kids are properly provided for. But, we also want to make sure that our kids will learn valuable life lessons from what we give. We also want to make sure that they do not develop the thinking that “mommy or daddy will always give me money whenever I need it!”

With that in mind, I have tips that you can use as a guide for this practice:

Have a strict budget and stick to it. 

When your child comes up to you and says that he/she spent all the allowance you gave, do not give them more. You have to let them learn the consequences of their spending decisions. If you continue to give them money even though they did not budget, they will see money as an endless resource.

Help your child to manage time and money. 

Let your kids know that how much time will go by until the receive their next allowance. Break that down into bit-size chunks. For example for smaller children it is easier to give them a weekly allowance than a monthly one. Understanding how long a week is and how long you have to wait to get more money after you spent it all, is a very important part of the learning process.

Let your kids have the autonomy to manage their own money. 

I know it might be hard to give your kids free rein over their money. But you have to understand that they can't learn if their hands are being held the whole time. We have to learn how to trust our kids and let them make mistakes in their own money decisions. Practical experience is one of the best ways they can learn to be mindful and conscientious about their money.

As parents, we want our children to develop positive money behaviours and a responsible mindset as they grow up. What we can do to help is to instill good habits from a young age.

Dear parents, be mindful that an allowance is not just a privilege you give to your kids that empowers them with choices. It is also an important tool to teach them about the responsibility that comes with choice.

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February 3, 2020

Marty’s World: Meet George

marty's world, george the cat



George, Marty’s kitten,
is all black and white.
He sleeps during day 
and goes crazy at night!
He races around 
at a neck-breaking pace,
and when Marty holds him, 
he scratches her face.
He can be quite vicious 
and hates being hugged.
He’ll bite you and claw you, 
then walk off quite smug.
But when he is hungry, 
he’ll sneak up and purr,
then there’s a chance 
you might stroke his soft fur. 
Once he is fed, he will curl up all day,
until it is dusk, when he wakes up to play.

marty's world, george the cat
January 27, 2020

Parental Guide: Good Money Habits This Money-Giving Season

marty with money gift

I hope you had a very happy holiday celebration with your family! As the festivities dwindle down, I want to discuss with you what happens after all the gift-giving. This article is about discussing with your kids how to save money given to them. After all the physical and monetary gifts, another gift we can give is helping our kids develop good money habits, financial confidence, and responsibility.

Impart Financial Confidence By Showing Your Confidence

The best way to impart financial confidence to your child is to show them that you believe in them. When you talk to your children about money, especially their money gifts, make them realise that every decision they make is theirs.

Remember to offer your suggestions and your guidance, but do not force or push your idea in favour of theirs.

Here are some points for you to remember whenever you're talking to your child about what to do with his/her holiday money.

Don't forget to remind them about good money habits and saving

One of the things that should be constant is reminding your kids about saving their money. Talk about financial responsibility but don't be too insistent about it though. Mention it a casual manner while conversing.

Here are some tips on how to open up the conversation and subtly advocate for good money habits:

"I saw that your Aunt Berniece gave you $150 dollars for Christmas. That is so kind of her! Do you already know what you want to do with it? How much do you want to spend and how much do you want to save?

"If you don’t know what you’d like to buy just yet, why don't you put it aside for now? We can go to the bank together to open a savings account for you."

"Have you considered giving a small part of your Christmas money to charity or an animal shelter? We can have a look at them together if you want."

The goal is to inject the ideas in their head, but not order them or tell them that it's something they should be doing. Rather, you suggest to them the good practices that you think they should be doing. You then offer to go with them or help them out if they choose to take your suggestion. After all, the money was a gift to them.

Give them ownership over their money decisions

Let your kids buy their toy or chocolates or sweetie if they want to. The money was gifted to them. It's their money and they have full control over how to spend it.

Remember that you are trying to open a discussion with your kids how to save money given to them. Giving them ownership over their money decisions will allow them to make mistakes. As parents, we hate for our kids to make mistakes and suffer from the consequences of their mistakes. But we have to remember that mistakes are the best teachers.

It might hurt to see them be a bit careless or lose some money. But we have to let them stand and walk on their own two feet. When they realise that mum and dad will not pay for their mistakes; they will begin to think twice and begin to be more conscious of their spending.

Your advice is a piece of advice, not a command.

You have to remember that every time you give your children advice on what to do with their money, it is just advice. This means that they have the option of not accepting your advice and doing something else.

Let them. You have done what you could by making sure that you give them guidance towards good money habits; let them decide what to do with it.

Kids can learn and develop confidence, independence, and a good sense of responsibility. It's up to our role as parents to make sure they develop it by encouraging the right conversations and good habits towards it.

Did you enjoy this article? If so, please subscribe to our Monthly Money Tips newsletter to get advice on raising financially confident and responsible kids.

January 24, 2020

Living Consciously Is An Everyday Consumer Decision

smart way to start books

I was interviewed by Anusha Swetha of Vivamost about my advocacy for financial literacy and sustainable development. I got to discuss how I believe that your everyday transactions reflect your values. Sustainable living isn’t just about reducing waste and speaking out; it’s also about the kind of companies you support.

Your Purchase Decision Can Be About Making A Stand

Ordinary people like us might think that, alone, we can’t really have a big impact. We might think that we don't have the power to create laws or the influence to sway policies that would make our world a better place. It also comes to a point where we feel insignificant, that our individual consumer choices just a drop of water in a very capitalist ocean.  

I beg to differ. Every single product or service we choose to buy sends a message about the kind of commercial and corporate practices we support. Sustainable living is about making a conscious effort to know who makes our products and where they come from.

People around the world are more aware than ever of environmental concerns. To send stronger messages to companies that we care about the environment, we have to support companies that do, too.

Conscious living and sustainable consumerism aren’t just about buying "bio" and "eco-friendly" products. It's also about making sure that the companies who make your products are dealing with ethical and sustainable business practices.

Live Consciously

You see, the sustainable lifestyle we choose is reflected in the products and services we support. It’s hard to make every choice 100% sustainable, but every little bit counts. Whenever you can, choose products and services that have more positive impact on our planet.  What's important is that we live each day more consciously and conscientiously.

We have to realise that sustainability and sustainable development are multi-generational efforts. For our children to begin living a more sustainable lifestyle, we have to set good examples and engage them in a dialogue about conscious choices.

What smart choices will you choose to make today?

January 13, 2020

Marty’s World: Meet Francis

Francis_Smart_Way_to Start_2 (1)



Francis is Marty’s inseparable friend!
Their friendship is strong 
and won’t come to an end.
Marty found Francis when he was just small
He fell from his nest in a tree very tall.

The poor little birdie lay flat on the ground,
He might have been eaten, had he not been found!
Lucky for Francis that Marty was there,
She took him back home and gave him good care.

She made him a nest and gave him some food,
he seemed to be happy and in a good mood. 
He chirps when he sees her, and whistles a song,
He follows her everywhere, the whole day long!




Favourite Food
Cake crumbs, tiny bugs and earthworms.

Favourite Quote
Some books are to be tasted, others to be swallowed, and some few to be chewed and digested.

Francis is named after Francis Bacon (1561-1626), an English philosopher and
statesman who is credited with developing the scientific method and who was influential throughout the scientific revolution.

Why Gifting Your Kids Money For The Holidays Is A Great Idea

mum giving amrty money

Happy holidays, fellow parents! This article is something that’s very relevant for the recently concluded holiday season. I'm going to be talking about gifting your children money for the holidays.

Caught in-between?

Sometimes we’re stuck between:

  • giving our kids things they’ve always wanted (like a toy, shoes, clothes, etc.)
  • giving them money so that they can have more freedom with the gift you’re giving them.

As an advocate for financial responsibility in kids, giving your kids money for Christmas is a good choice. 

I can feel that this decision might raise some eyebrows for some. But let me explain why I think money-gifting is a good idea.

Gifting the kids money allows you to engage them in money conversations.

When your kids open their presents, you can begin to talk to them about money. You can talk about saving it for the future or allocating money in different “budgets”. It is also an opportunity to give them light tips about responsible financial ownership

You can also consider gifting your child a piggy bank together with the money. That way, you can nudge them towards putting all (or a part of) the cash into the piggy bank.

Reminder: The money you are giving them are gifts, meaning there should be no strings attached.

When you are gifting your children money for the holidays, you have to remember that the money you are giving them should not be subject to too stringent  “savings conditions”. You shouldn’t tell them that they can't spend the money. The money you give them is theirs and they should have the freedom to spend or save it in any way they want to. But you should certainly engage them in a dialogue around what they want to spend on and why it would be sensible to save some.

We want to give them confidence in the choices they make involving their own money. You are using the gift as a tool for opening up responsible spending and saving habits with kids.

I don’t recommend gifting cheques or digital money to younger children. Cheques are very abstract concepts and children cannot understand deep abstract concepts yet. They are still not able to understand that a piece of paper with the amount written on it can equate to real money.

Stick to cash for younger children as it is more concrete. As I mentioned in one blog post, it is important to concretise the concept of money.

Take advantage of kids' receptiveness for tactile and kinesthetic experiences.

I recommend breaking the bigger bills into coins or smaller bills! Because this allows a more tactile experience for them. They can count smaller bills so that they can see how coins or smaller bills can make twenty, fifty, or even a hundred! This imprints to them that even the smallest amount will contribute to wealth-building.

Aside from that, don't be dismissive when they ask you follow up questions as you give them tips on saving. Children are naturally inquisitive and curious beings, so they are bound to ask. Use that to your advantage. Explain the importance of saving but also don't forget to remind them that the money is theirs.

Be responsible money gifters!

Part of responsible financial parenting is making sure that our kids do not create unrealistic expectations on receiving money. So I would like to remind you to discuss expectations with your kids.

Do not forget to explain to children the concept of gift and that the money given are gifts. You have to let them know that they should not expect to receive such amounts every Christmas or special occasion.

When you give cash gifts that children will personally be handling and counting, make sure that the amount is appropriate for their age. There's no point in handing over something like $1000 dollars to a 7-year-old. They won't be able to understand the immense value of such big money. The things they want won't reach that value anyway. You’d rather gift them a smaller amount they can manage themselves, and transfer the rest directly onto their savings account, for example.

Fellow parents, I hope you and your family have a very wonderful holiday celebration. I hope this quick article helped you decide on whether you'll be giving your child money for the holidays or not.

If you find these tips useful, subscribe to my Monthly Money Tips newsletter.

Happy holidays!

December 18, 2019

The Real Cost Of The Gender Pay Gap

Mara speaking in front of an audience

I had a brief, but a very eye-opening interview with IMEX America about the Women and Risk, where I talked about the real risk that women are facing: the compounding effects of the gender pay gap.

It was one simple question that started this all actually:

How does a pay gap affect a woman over the course of her lifetime and how does it affect her wealth creation?

To be honest, I didn’t realise that asking this question would open up a Pandora’s box that would lead me to as far as creating a children’s storybook that will help facilitate money and gender pay gap discussions.

When I first encountered the question on the pay gap, I asked our Chief Investment Office to simulate the wealth growth of a man and a woman after university, in setting out their professional journey, buying a house, etc. The result was so stunning that our team couldn’t believe the output when they ran it for the first time.

After a couple of days, they finally brought the model to me and told me, “Look, we tried and we calibrated and we checked everything. The model is right, but the figure is shocking.” 

It turns out that just a 10% pay gap (a very benign assumption) and all else equal between man and woman; resulted in a 40% wealth gap over a lifetime. Just to put this into perspective: a Eurostat report last 2017 reported that the highest recorded gender pay gap in the EU is in Estonia at 25.6%, and the lowest is in Romania at 3.5%.

On average (in the EU,) a woman’s gross hourly earnings 16% less than a man.  

In my home country, Switzerland, the gender pay gap is at 17%. At about 20% pay gap, with all else equal, the wealth discrepancy balloons to 85%. 

It’s a shocking, but oftentimes, heartbreaking reality for most of us.

That is why we constantly need to bring financial awareness into the conversation. I keep encountering women who say “I’m not really as involved in financial matters as I’d like to be.” Very often, women think that their partners or spouses are more competent than they are.

You see, we did a survey on several thousands of women internationally and it turns out that 82% of women believe that their partners are more knowledgeable about money. Unless your partner studied finance explicitly, then there should be no reason that your partner will be more financially knowledgeable about money than you are.

We have to work harder not just developing women's financial knowledge but also improving women’s financial confidence. We have to develop and grow financial awareness and trust more than financial expertise. 

How do we make women aware of the fact that abdicating financial decisions is not a good idea, especially when those (wealth discrepancy, pay gap, etc.) are the consequences that you could face?

The answer to that is to start early.

Research shows that confidence is shaped by the age of 5 and adult money habits by the age of 7. So if we’re not having this conversation with little kids, especially with little girls, then we will be guilty of helping perpetuate the shocking pay and wealth discrepancies between man and woman. 

We have to start talking to our little girls (and boys) early on so that they know their worth and that they are encouraged to negotiate their worth. If they are doing a chore, can they ask extra money for it? Negotiation and knowing your worth are two skills that are important, especially when you’re entering your professional careers.

We can’t let our children grow up unaware and thinking that the world is equal and fair because it is not. We have to equip them with the awareness and the truth so that they can continue to make choices that are towards a sustainable and equal future.

Why Teaching Your Kids About Money Is Important

mum teaching marty about money

As parents, we all want the best for our kids. We want our kids to get the best upbringing, the best education, the best quality of life, and the best financial situation. An important part of raising our kids and giving them a good upbringing is making sure that they grow up to be financially responsible individuals. We are the biggest influence on our children’s development and it’s important that we set good examples and become more transparent about money with our kids. This includes teaching our kids about money.

Monkey See, Monkey Do

An annual study created by T. Rowe Price called Parents, Kids and Money Survey last 2017,  showed that parents are likely to pass down good and bad financial habits to their kids. This survey sampled 1,014 parents of 8-14-year-olds in the US, which analyzed parents’ attitudes and behaviours that were associated with kids’ financial habits. The survey found that positive money behaviours and expectations among kids are often associated with parents’ decision to let their kids decide how to save and spend their money on their own, as well as parents becoming good financial models. Negative and troubling money behaviours and habits were also frequently seen on kids who have a troubled history with money.

The good and bad habits that our kids learn and develop come from us, so we have to be more aware of how we discuss and treat money in front of our children. 

We are the key to our own kids’ financial success. It's important that we figure out how to teach our kids about money and how to slowly inculcate the money habits that will accompany them through adulthood. 

We have to be diligent when it comes to teaching our kids about money.

We have to start exposing our kids to money and let them participate in small money decisions. That way, they begin to develop a very clear and concrete view of the value of money and how it works. 

With the rise of credit card usage and the increasing number of digital and blockchain payments, the notion of currency is becoming more and more abstract. If children are not able to get a grasp of the actual exchange of money and goods, then they will develop the idea that money is endless and easy to come by.

Also, our children do not see us save when all our money interactions are digital. They do not see our salaries being wired to our accounts, and part of that being wired to our savings account. These distant digital-only transactions make it all the more important to create interactions around money at home for children to observe and copy. 

Get Started on Teaching Your Kids

Forbes.com created a simple guide on how to slowly introduce your kids to money including how to slowly introduce these concepts in everyday practice and everyday encounters.

Ages 3-5

The time you start teaching your kids about the concept of delayed gratification. You teach them that whenever they want something that they don’t have the means to purchase for, they will need to wait and save up for it.

Ages 6-10

You show kids that money is a limited resource. This is when you need them to participate in actions that will allow them to practice transacting with a limited amount of money and making purchase decisions based on the budget you set.

Ages 11-13

You can begin to teach more abstract concepts like compounding interest. At Smart Way To Start we believe that it is important to explain the notion of interest even earlier - and help children as early on as possible that money in a piggy bank can’t grow. You can only fill a piggy bank but the money inside it does not grow. For that you need a savings account, so your money can be put to work. We think it is very important that children learn this from a young age, because every year counts when you are compounding interests. The earlier you start, the more money you earn.

Introducing early the notion of interest is key, because once children understand it they can also understand why debt can be dangerous. Compound interest on money you owe can make the amount owned increase very rapidly - especially with high interest rates on consumer debt. So when you children are teenagers and might receive their first credit card, It is very important to discuss  responsible credit card ownership and finance charges. 

Ages 14 and above

At this point, your child would be reaping from the fruits of the financial teachings you’ve been imparting since age 3, and the best you can do is to continue to be open about finances and money with your child.

If you want to learn more about how to slowly introduce your kids to money, I've provided 5 easy tips on this article.

If you’re interested to receive Monthly Money Tips,  an email series that will help parents like you raise financially savvy children, you can sign up through the link below:

5 Easy Tips To Teach Your Kids About Money

introduce your kids to money - mara Harvey - Smart way to start

Dear parents, are you trying to figure out how to introduce to your kids to money and its concepts but not sure how to get started?

As a parent myself, I understand that we all want the best for our children and we want them to have a bright future ahead by helping them develop the best habits -- from work ethics to time management to managing money wisely. And indeed, one of the hardest (and most important) things to teach kids is the value of money.

If you're interested to know more about why teaching your kids about money is important, read my article here.

Early bird is the way to go

Research by government-back Money Advice Service (MAS) shows that money habits are formed as early as age 7, so if you want them to have good money habits when they grow up, it’s very important that you begin to introduce the right money habits as they go through their important developmental years. The more they know about money and what it is, the easier it will be for you to teach them how to save and spend it wisely.

Oftentimes, we dismiss children the moment we approach or reach decisions involving money (like paying the bill at a restaurant or checking out groceries at a supermarket.)  The approach I’ll be sharing with you involves the opposite: introduce your kids to money as early as possible. Get them involved and aware of how money works and what it’s used for at an early age.

To introduce your kids to money, start with something as simple as talking about money to your kids. Use every opportunity you can. It doesn’t have to be something as heavy as telling them how hard it is to work for money or very abstract concepts like interest-earning or banking. It can be something as easy as asking for their help in counting the pennies to pay for small transactions or allowing them to partake in the simple practices of having them hand over the money to a vendor.

If you‘re not sure where to start, here are simple tips to get started how to introduce your kids to money: 

1. Make daily money decisions visible.

Children are very observant and they pick up a lot from just watching you do things. When you’re out buying groceries at the supermarket, use the opportunity to engage with your child as you line up items on the counter. Let them help you as each item gets scanned and let them see you take money out of your wallet. This creates concrete experiences for them around your household’s money habits.

2. Let your child participate in money moments.

This can be through simple things like letting your child hand over coins or banknotes to the waiter when you pay for a coffee or for food, and letting them receive change. 

3. Talk about money moments openly.

After having your child receive the change, you sit down, count, and check the change right beside them. That way, they know that every coin counts.

4. Make money moments engaging and fun.

Whenever possible, relate money-making decisions to goals that are motivating or interesting to your child. You can do this by letting your child actively participate in decisions concerning his/her interest. For example, if your child loves pizza, then try to bring them along when you’re buying the ingredients and let them participate in the exchange process (handing the cash, getting the change back, and counting the change.)

5. Celebrate good money habits and achieving savings goals.

Make use of a child’s tactile and kinesthetic learning for this. You can ask your child to count bills and coins as they put it on the piggy bank and then praise them for doing good work in saving money.

The tips I mentioned above make use of concretizing what money is and what it does. At such a young age, there is no point in trying to discuss the finer and abstract points of money to your child. At this point, the goal is simple and very straightforward: you need to introduce and expose money and monetary practices to your children as much as you can. That way, it becomes easier for you to discuss it with them as they grow up since the concept is not completely foreign to them.

Dear parents, if you have more tips on how to introduce money to your kids, don’t hesitate to share your tips with the community! Together, let’s help our kids grow towards a financially sustainable and secure future.

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November 8, 2019

My Interview with CNN Money Switzerland

CNN_Mara_Harvey_Smart_Way_to_start (1)

I've been fortunate enough to have been interviewed by Ana Maria Montero of CNN Money Switzerland, where I got to share more about my advocacy for financial literacy for young girls (and boys.)

In this interview, I got to share about the statistics and motivations that got me to creating the  "A Smart Way" series.

If you're interested to watch the interview, you can access it here. Otherwise, here is the transcript for you to read. I've underlined some important points that I think captures the essence of this interview.

AMM: Do you remember the first time that someone sat down with you and talked to you about how to manage money? In my case that happened quite late in life. But I’m joined today by a guest who advocates for this skill being learned much sooner rather than later. Dr Mara Harvey thank you so much for joining us today.

MCH: Thank you for having me.

AMM: Now, do you remember the first time someone sat you down and talked to you about money?

MCH: No. Actually, I don’t really because I just remember being told how important it is to save in life but never having a real conversation about the magnitude of that, the importance of it, and how to picture it, especially in the long term.

AMM: And why is that important?

MCH: It’s important because of longevity. Very simply speaking, we are going to live much longer than we thought we would. Our children are likely to live to the age of 105, maybe, with the medical advancements today. And I look at that’s and think: that’s wonderful. How are they going to be able to afford living to the age of 105?

And I think it’s a structural problem we’re not really addressing. In addition to the problems that we already see today with regards to women and involvement in financial decision-taking.

AMM: So it’s really, from what I understand, especially from the books that you’ve written...you’ve written a series of books on instilling financial confidence in children…[that] this really happens at an early age. Is it like languages where there’s kind of like a window of financial understanding that is more difficult to overcome later in life?

MCH: There is, actually. There’s also research that points to two things and that is: that confidence is largely shaped by the age of 5 and that money habits as an adult are largely shaped by the age of 7. So that really means that it is in primary school age that children’s attitudes towards money are formed.

And I think that’s why we need to start changing the conversations if we want people to grow up with a different notion of money and ethics.

AMM: I mean I have a child in second grade and they have just started to count money in school. So but I feel like, instilling adult financial decision-making in a child...that’s quite challenging.

MCH: It is challenging but money is something that surrounds us every single day. Every time a child wants to buy sweetie or a toy or a drink...so I don’t think it’s ever really too early to familiarise them with what is the value of money but also what are the values that you are transmitting with every financial decision you are taking.

AMM: And this is the theme that runs through your books?

MCH: Yes

AMM: Not only the spending, as I understand it, but also the effects?

MCH: Absolutely. So there are two themes that are really very very close to my heart. The first has got to do with equality and the second has got to do with sustainability. And these are two themes that I really wanted to bring to children. And indeed at the beginning, friends’ reactions on the first book, which is about earning your pennies and equality. Why would a little girl earn a penny less than a little boy for the same chore?

And many people ask me: why do you need to talk to children about that? And I tested it out with my own daughter who’s now 13 (she was 12 at the time.) And I said, have a look at this little story and tell me what you think.

She reads it and says “Oh it’s really cute but I don’t get the point. Why would a little girl earn less than a little boy?”

And so that made me realise that today’s generation of girls does not know that they are going to face the same problem as my generation. I also grew up thinking the world is fair and that we’re all equal and that the only limitation to my future would be my own intellectual capacity and my willingness to learn and to adapt..so I didn’t there there was going to be any sort of disequality topic that I would be confronted with in life. And I think girls today also grow up with the naive belief that everything is gonna be fine and they’re not equipped with the skills needed.

AMM: Yes and the parents...and one thing that..again a takeaway from the book is that..and from many...a lot of research out there...that it starts not only at an early age but in the environment, in the home and the behaviour that’s learned from the parents.

MCH: Yes, absolutely. Unfortunately, there’s a lot of research that also shows, when we talk about pay gaps...usually, we tackle this from a business perspective. We think about it in terms of people’s adult life.

But there’s lots of research that shows that pay gaps are already visible with pocket money. By the age of 10, there’s already a discrepancy that can be anywhere between 10 and 30 per cent and this is across many, many countries.

And that also led me to reflect because I said that means that we as parents are actually perpetuating the patterns that have led to the inequalities today without even realizing it. Nobody does it with bad intentions. Nobody would discriminate their own daughters but they are being steered towards either more unpaid chores or chores that are just valued less...if they’re getting less overall. And we’re not teaching them to negotiate.

AMM: I think that’s a whole other conversation. My eight-year-old is quite the negotiator but then we do have to steer her in that direction in terms of negotiating when she’s older. 

But something that comes up in the first book is this idea and it’s fundamental is this idea that children are compensated for the work that they are doing.

MCH: Yes.

AMM: So that little girl on your story does separate chores in the house and she gets money for this and then she saves it. I have to tell you that sparked quite the debate at my dinner table because...you know my husband is raised in a way, in which he feels that family...you shouldn’t be paid for chores that you do for family. Children should not be taught to expect always compensation for doing things that they should do anyway. 

So how do you reconcile this?

MCH: Correct. So the jury is really out on that one. And I also do believe that we need to teach children that there are certain contributions to family life and to a household where you do not get paid for that. That is part of being a family.

But there are probably also chores where one could say “This is a chore for which you might get some extra pocket money if you do it if you do it well.” because it’s a learning opportunity and that’s what I think the conversation is really about. It’s not about you know, saying every single chore needs to have a price tag.

But it is about giving the children the opportunity to learn to earn money, to save money, and spend money wisely so we need to give them a framework where they feel they can control that. They can do a task, they can do it well, and they can get a reward for it that they can then decide “What am I gonna do with the money I’ve earned and how am I going to manage it?”

It’s really about giving them a platform to learn.

AMM: And it’s quite the negotiation that they place there. And if we look at savings, I have to say I kind of giggle to myself because you have a whole book on savings and again it comes up on the first story and then it has its own story…

But reality is we don’t even get an interest rate on savings accounts at the moment.

MCH: I know, I know. 

AMM: So how do you reconcile this? Sure it’s good to put your money away but if you don’t get anything in return…

MCH: That actually breaks my heart, and especially as an economist. The fact that we are at a negative interest rate environment is actually pretty much a tragedy if you ask me. Indeed, book 2 does try to explain the notion of compound interest to children in a very easy and playful way. I believe that it is important because ultimately that is what will allow people, over a very long time horizon, to make such a difference in the way they manage their money. 

Now it’s true that today, you cannot generate returns just on a savings account, it needs investments for that to happen...and maybe to explain investment to a 5-year-old child is stretching it a little too far. 

But I do believe that the concept of compounding over time, the concept of “if you let your money work for you, it will grow over time.”

And the way I try to explain it is: “money in a piggybank cannot work for you so you need something more.”

AMM: Which can be short-term or long-term but…

MCH: Yeah.

AMM: Another interesting distinction, which I think is very applicable to these generations and it wasn’t to ours...is the idea of digital money. 

MCH: Yes

AMM: And...I think it’s such an interesting distinction to make. 

MCH: Yes, it is. And indeed the third book on spending has a hidden chapter for that reason.

So, once you explain to a child all the tradeoffs of spending now, spending later, saving more, buying something cheap or buying something more expensive and looking at quality; the question of digital money really is so important because you realise that those tradeoffs are so much faster to make in a digital world where it’s just a swipe or a tap and the money is gone but the amount of time to earn the money is still going to be the same. It’s not necessarily going to be faster or easier.

And the same way you actually can’t touch digital money, you cannot touch the chapter on digital money so it’s actually only digital to try to make the point to children that you know...it is abstract and you need to learn about these abstract concepts. And that is again why I think these conversations around money and around digital money do need to happen early because digital is part of children’s lives so early.

AMM: So now, you’re going to have to do a chapter on cryptocurrency?

MCH: Possibly! Indeed that is already in the back of my mind for 2020. Let’s see.

AMM: That will be a bit challenging...explaining blockchain, et cetera.

MCH: Very challenging.

AMM: And now you’ve really...and now this idea of making smart choices with your money and addressing the sustainability, the planet, the sustainability development goals.

MCH: Indeed. So at the beginning of the journey was talking about values and talking about equality and the end of the learning journey is really about sustainability. 

Why?

Because if we’re going to teach children how to earn money and what it means, why don’t we also explain to them that spending money has an impact on our planet. Every single money decision on a daily basis has an impact on our planet. And if we want to change the impact that we’re having today; if we want money to be a force for good, well it’s not just about all of the investment decisions we take or all of the consumption decisions we take as adults but it’s about creating that awareness already with children that every single money decision that even they take has an impact. 

So if we get children to grow up over the next 10 years, knowing that we can do better for the planet, I think that’s a good thing.

AMM: Now if we want to broaden out quickly as we wrap up the topic of financial literacy around the world, which we know is a challenge not only for women, but also for men. I mean in general, there is still so much ignorance.

What can be done?

MCH: Look, I think we just have to broaden out these conversations everyday a little bit.

I remember having seen research that shows that on aggregate, financial literacy seems to be lower than it was 30 years ago.

So I ask myself the same question: what is happening?

AMM: We have more access to information, right?

MCH: Exactly. And I think that’s part of the problem because the information is out there. There is a whole digital world of information that you can tap into if you want to that I think the necessity to teach these topics has dropped a little bit off the priority list and I personally think that we need to go back and fix that. 

Because data is showing that we are less and less knowledgeable about long-term financial decision taking and the implications of long-term financial decisions. We can’t afford not to have that knowledge in a world where we’re going to live decades longer than the generations did 30 years ago.

AMM: Can we, then, help lift people out of poverty with financial literacy? Is this a tool that can really move that forward?

MCH: I think it’s a tool that can complement all the efforts around lifting people out of poverty because clearly, there’s the whole topic about economic value creation, creation of employment to lift people out of poverty. But once they have access to decent employment in order to be able to manage money in a way that they understand the long-term life implications.

I’m concerned about old-age poverty. I think that these conversations, both with children at the starting point (no child is going to be thinking about “where will I be by the time I retire?”) but also with adults, and to engage parents in these conversations so that they all can reflect for themselves on “Hmm, have I really spent enough time thinking about the implications for me?” I think is important, because old-age poverty risks being a female problem because the women are just going to live even longer. 

AMM: Absolutely. What about Switzerland? Where is Switzerland in this landscape?

MCH: If I’m not mistaken, Switzerland scored something like 57% on financial literacy overall and the countries that are best in mark scored 70-70+ so I find it a little sad that as one of the leading financial places worldwide, our own country doesn’t score higher and I would really make a plea for saying that I think financial education is something that needs to be in the DNA of our country. It needs to be at the core of our education systems as well. It certainly needs to be something that accompanies us on every level. Not primary school, not just secondary school, not just when people start their active life. 

I think it has to be a lifelong conversation. 

AMM: As we wrap up, I wanna take you back just to the moment where, I think it happened at Davos at the World Economic Forum, where you had that “aha!” thing and said “this is what I wanna do, I wanna write these books. I think this is the way to go to address financial literacy especially for girls.”

MCH: Indeed. The whole topic of female financial confidence was in the spotlight because we realised that the consequences of pay gaps on wealth gaps are so important. If you look at all the other aspects that influence a women’s financial well-being over her lifetime, there are so many considerations where we need to better educate or involve women and increase their participation.

But it was a comment made by Shelley Zalis, the CEO of The Female Quotient, in Davos; when she said

“Confidence is shaped at the age of 5.” And, indeed, I went to research that and it’s founded. That’s when I realised that if we tackle the problem only with adult women, we tackle the problem 20 years too late.

We essentially really need to start at the age of 5. That’s what made me want to find a way to make this fun for children and I thought “Fun? It needs to be in rhymes.” And so that’s how the books were all written in rhymes.

AMM: Alright, wonderful. Mara, thank you so much for joining us today and for sharing your story.