It is a Saturday, but instead of spending the day at the mall or beach, groups of 8 to 11-year-olds and teenagers are huddled in an office in Dubai’s Business Bay learning about personal finance.
Topics such as income, expenses, investments, loans, savings, inflation and retirement were covered by the Financial Literacy Boot Camp for Kids and Teens run by The Kids Finance Initiative (KFI), which took place over two four-hour Saturday sessions.
“I learnt how to grow your money and how to save and budgeting, and how banks work … and also needs and wants,” says Lama Al Khouri, 10, an Emirati. “Need is what you need for survival and want is what you don’t really need, but you would like to have.”
In another room, teenagers tackle more complex questions such as "If you are earning 1 per cent in a savings account and inflation is at 3 per cent, are you able to purchase more or less next year?"
While the condensed boot camp, offered in Dubai and Abu Dhabi, is new, KFI has been offering money management courses for children since it started two years ago. The UAE government has also taken steps to include personal finance education in schools. As part of a seven-point deal agreed during a meeting of the Executive Committee of the Saudi-Emirati Co-ordination Council in January, officials announced a programme to promote basic financial concepts to pupils aged 7 to 18.
Other recent private sector initiatives include Goal, a programme launched by Standard Chartered Bank in the UAE to teach teenage girls sports and life skills, including how to be money savvy.
But education experts and advocates for teaching kids financial literacy say there is still much more to be done.
Marilyn Pinto, the managing director and founder of KFI, says she started the company because she noticed her own two daughters, now 10 and 12, did not understand and appreciate the value of money.
“They had no idea about money and they weren’t being taught this at school, so it wasn’t a problem with just them, it was an endemic problem,” Ms Pinto says. “For them, the only relation they knew was, money comes out of an ATM.”
KFI not only offers courses in money management, but also entrepreneurship and investing, taught using an activity-based curriculum from the National Financial Educators Council based in the US.
Studies have shown that teaching personal finance at a young age has an effect into adulthood. A 2014 US Federal Reserve report found students exposed to personal finance education had credit scores that were 7 to 29 points higher than those of students who did not have such classes.
The importance of being financially savvy in the UAE is highlighted by nearly half of its residents being in debt, according to a 2017 survey by Amazon-owned payment solutions company Payfort.
“The government is waking up to the fact that, yes, we do need to do something, but the education system moves very slowly – not just here, worldwide,” Ms Pinto says. “There isn’t a single school anywhere in the world that’s doing enough to teach kids about financial literacy.”
In the UAE, schools have started teaching personal finance as part of moral education, which was introduced as a compulsory subject in September 2017. Others have been introducing money concepts through entrepreneurship projects and business fairs.
Next Generation School, an American Islamic school in Dubai, started the “NGS Kidpreneurs” programme when the institution was founded in September 2016. Students in grades one to seven have to apply for jobs – such as a banker or electrician – and earn a monthly salary, while also paying monthly rent.
On the entrepreneurship side, the pupils submit a business plan for the student store that runs every month. They then earn “NGs” – a form of income – which they can exchange for activities such as ice skating at Dubai Mall, Bounce or Green Planet, through the school’s partnership with Emaar.
Pranti Zaveri, a grade two teacher and head of the programme, says NGS Kidpreneurs teaches students how to spend and save wisely, but also provides an opportunity to teach real world financial topics.
“We’ve had so many real-life issues, where kids have photo-copied the money or money’s been stolen. So we’ve had these real conversations with them and they realise that – oh you cannot just photo-copy the money, it has a value,” says Ms Zaveri, an entrepreneur herself, who started the online shopping directory Yalla Spree.
At Swiss International Scientific School in Dubai, grade five students held a business fair earlier this month where they applied for a loan from their parents to pay for supplies, such as lemons and sugar to sell lemonade or brownie mix. The children later paid back their parents using their earnings. In parallel with the fair, teachers discussed what makes an entrepreneur, financial planning and ethical business planning, says grade five co-ordinator Jose Rodriguez.
Both NGS and SISD emphasised the importance of factoring in charity, requiring a percentage of the students’ profits to be given to Dar El Ber society and Dubai Cares.
Standard Chartered Bank’s Goal programme started in 2006 and is now in more than 20 markets globally, including Pakistan and Jordan. It was launched in the UAE five months ago and held its first event at National Charity School in Dubai. The programme provides financial literacy, life skills and employability training to girls between the ages of 12 to 18 based on four modules: Be Money Savvy; Be Yourself; Be Healthy; and Be Empowered.
Some schools are also offering more detailed personal finance education for older year groups. At the British School Al Khubairat in Abu Dhabi, students in year 12 and 13 have a block called “managing finances” as part of the school’s moral education and life skills programme.
The block, which totals around six hours per year, prepares students for university and the workplace, says school headmaster Mark Leppard. Students research the costs of rent, utilities and groceries in their intended destination, and then come up with a budget based on their sources of income. They are also taught how to open a bank account and how overdrafts and interest work.
Esref Sah (an Arabic phrase that means “spend wisely” in English), a financial awareness initiative established in 2013 by the Emirates Foundation, also focuses on high school and college students. The programme has taught financial literacy to more than 8,000 Emirati youths through one-hour basic workshops for ages 15 to 18 and two-hour advanced workshops for university students.
The private sector is also taking note of the urgency to inject students with financial knowledge before they head off on their own. Gabbitas Education Consultants in Dubai has teamed up with Steven Downey, a senior associate with financial advisory company Holborn Assets, to offer a Money IQ consultation at a cost of Dh1,500 to Dh2,000 for students in their final two years of schooling.
“For parents, it just gives them more confidence that, with their newfound freedom at university, their child at least won’t be breaking the bank,” says Fiona McKenzie, director of Gabbitas Middle East.
But Ms McKenzie says personal finance education should be taught in schools by the age of 12.
Ms Pinto thinks it should start even earlier. “We need to catch them in their first window of learning, which is up to age 11,” she says. “You miss that, then you go into the second window of learning, where it’s a lot harder when they’re teenagers. Their values and habits have already formed.”
Khalil Al Khouri, the father of Lama and her sister Alghala, 8, agrees.
“In school, they don’t teach this kind of essential knowledge, which I think should be from the elementary level, not from the higher level,” says Mr Al Khouri, 45, an administrator in a FinTech company.
“I’m going to register them for the more advanced course,” he adds.