I recently came across a story in The Telegraph about a school initiative that rewards children with credits for hard work and good behaviour, they will be able to earn, spend, invest these credits, and even experience something resembling “taxation” on them, contributing towards school facilities and resources.

At first, I found the idea rather compelling.

We absolutely need better financial literacy from a young age. Children should understand that resources are limited, that communities require shared contributions, and that taxation is part of how society functions.

But one question kept lingering:

What happens when we put a price on being “good”?

If good behaviour earns credits, and those credits are then taxed, might children start learning to calculate not only the value of money, but the value of compliance?

Is being good worth it?

What will it cost me?

There is a subtle difference between teaching children about economic consequences and teaching them to view their own behaviour through an economic lens.

After all, empathy, kindness, honesty and integrity aren’t transactions. We presumably want children eventually to do the right thing because they understand why it matters—not because there is a reward attached to it.

And what about children who struggle with emotional regulation, or who come from circumstances that make behavioural expectations harder to navigate? Cultural background may also shape how children understand, express, and respond to concepts of “good” behaviour. Could a system designed to reward good behaviour unintentionally disadvantage children who find it harder to conform– particularly those who already have fewer resources or less support?

Perhaps the answer isn’t less financial education, but separating financial literacy from character development.

Why not teach children real financial literacy?

If a 10-year-old can be expected to tackle challenging mathematics problems, why couldn’t they also be given meaningful financial questions?

Give them a bank statement and ask them to work out what came in and what went out.

Ask them to compare two savings accounts.

Let them calculate how much interest £100 could earn over a year, and perhaps explore what happens when interest compounds.

Give them a simple household budget and ask: Can this family afford this purchase? What happens if an unexpected expense comes up?

These are not abstract concepts. They are real-life mathematics.

And perhaps we could start much earlier with something as simple as £1 of pocket money, or say £5 per week – to learn budgeting.

Let children decide whether to spend it, save it, share it or wait for something they really want. Let them record what they do and review it at the end of each month. What did they spend? What did they save? What choices did they make, and what would they do differently next month?

Let that £1 become a little laboratory for learning about scarcity, choices, delayed gratification, opportunity cost, saving, risk, reward, and eventually, taxation.

This makes the record -> review -> reflect -> adjust cycle explicit, which strengthens the educational point.

If we can teach a 10-year-old to solve a challenging maths problem, surely we can also teach them how to read a bank statement, and perhaps genuinely prepare them start to their own business by the age of 13.

The question isn’t whether children are capable of understanding money.

Perhaps the question is whether we are teaching them not just “right” financial lessons – because what is right is always contextual – but the better financial lessons for the life.

Teach them that money has consequences.

But perhaps don’t teach them that character has a price.

This brings me back to a question I find increasingly interesting:

Is true growth about compliance, or alignment?

Compliance asks: “What do I need to do?”

Alignment asks: “What do I believe is right?”

Perhaps we can teach children economics without turning human character into an economic transaction.

Give them the £1.

Teach them how money works.

Empower them by teaching them how interest grows, how taxes work, how to read a bank statement, how to budget and how financial choices and negotiations shape their lives.

But let kindness, empathy and integrity remain priceless.