Questa sera parliamo del nostro libro Figli & Soldi a New York, alla Columbus Citizen Foudation, la fondazione che organizza la parata del Columbus Day e finanzia borse di studio per giovani italo-americani. Per i nostri amici che non parlano italiano, ecco un pezzo del nostro breve discorso in inglese. 

Tonight there are here also a few friends who contributed to the book by telling us about their experiences with their kids. They are three of the 40 families we interviewed for our book and who are scattered between the US and Italy. Well, our research confirmed that we all have the same problems: we are concerned about not spoiling our kids, and teaching them how to use money in a responsible way. It’s not easy. In fact, money is a big taboo, bigger than sex in many American and Italian families. 

Maybe in America there is more awareness about this problem. Indeed there are many books on teaching kids the value of money. Instead, in Italy, our book is the only one on this subject, so far. This is one of the reasons for why we wrote it.  

The second reason is that we have a child ourselves, Francesca, who is now 15, almost 16, so we had to decide how to answer her request for pocket money to spend on her various needs. We thank her  because she has been the guinea pig for the core idea of our book: to use allowance – or a fixed amount of money given regularly to our kids – to teach them how to manage a budget, balance income and expenses, make choices about spending and saving, and also giving to charities, and learning from mistakes.  We think an allowance helps kids become more responsible and independent. Our experiment with Francesca has gone quite well in this sense, because her allowance has not spoiled her, on the contrary, it has empowered her and encouraged her to earn more money by herself, for example by babysitting or teaching Italian to small kids. 

Moreover, an allowance can be used to teach kids basic knowledge about bank accounts, debit and credit cards, and investing. All things that will be very useful to them very soon, while ignoring them can be really costly, as can be seen from the number of young people who have gone bankrupt in America. 

This is exactly the third reason for why we wrote the book: we believe that financial literacy is extremely important  and that the sooner you start the better. We are very happy that we are not alone in thinking so. Just after our book was published, the Economist wrote a long story saying that “a global crusade is under way to teach personal finance to the masses”, because at the root of the current subprime crisis there are massive levels of financial illiteracy. 

According to several studies, both in the US and in Italy, most of the kids who graduate from high school don’t know what interest rates are. It’s no surprise that they end up with huge debts on their credit cards at college and, when they buy a house, don’t understand  how a mortgage works or if they can afford it. 

It’s interesting to note that many financial literacy initiatives in the world today are  among poor people, because they are the ones more in need of financial skills to get out of poverty.  The Economist mentioned Ms Billimoria who is doing it in India even with street children, 6 an 14 years of age. 

There are also several governments and central banks that promote financial education at school: the Fed here in the United States, and special public departments  in Great Britain, France and Germany. 

We hope that our book  helps start similar programs in Italy, and actually we already know that there is a movement in this direction, with Banca d’Italia, the Italian central bank, thinking of doing  something, and Abi, the national association of Italian commercial banks, promoting economic classes in schools.