Young children do not learn the important things until you tell them they are essential. Especially in the case of money, they need to know from an early age how to manage money. With the dynamics of the world changing so fast, financial literacy for young children becomes an essential aspect of life. Teenagers are always very impatient to have a lavish lifestyle on their earnings, and they are eager to stand on their own feet and use their money to have a luxurious standard of living.
Financial literacy for kids does not only mean spending it wisely, but it also suggests the habit of saving or investing.
Schools these days are inculcating many exciting programs to teach money-management skills to students apart from academics. To understand more about their finances and how the economy works, schools have also added financial literacy to the list. Apart from the schools, as parents, one of your essential priorities should be making children learn the importance of money and teaching them to use it wisely.
Now we all know the difficulties of teaching children or helping to inculcate habits in them. So to make this task more accessible, we have listed out a few points which would help your children have an easy understanding of money-management.
Talk about money directly
Times of financial crisis teach us money management and the efficient use of money. It is essential to make teenagers financially literate to help use their hard-earned money judiciously and be aware of money matters. Money is central to our day-to-day life, we transact not only for education but what we eat, clothes we wear, technology we use and much more. Even if you do not mention money in front of your teens, they are picking up on watching you anyway.
Talk to them about how hard it is to earn money and manage expenses. Help them realize that the most reasonable use of funds is using the existing funds to make more of it, through savings or investing.
Help them understand bills and purchase receipts
We deal with money-related matters everyday. It is all around us. Hence, financial literacy can be taught everywhere – For example, while shopping, you can teach your children the difference between wants and needs. You could also take this opportunity to help them understand what credit or debit cards are and/or how cash works and is used while purchasing something. You can also help them understand purchase receipts that contain cost as per item received and other important details.
Make them understand the importance of saving money
Help your children understand expenses and that income and savings play a big part in it. Teach them that it is essential to save first and adjust the expenses accordingly. Help them get into a habit of keeping some part of their pocket money as a saving in their piggy bank and set a goal. For example, in case they need a new novel to read, you can teach them how to put aside some cash every week to reach the cost of the novel and then go out and get them. This will not only help them realise the value of saving but will also help them feel a sense of independence when it comes to money-management.
Help them understand that money is earned
It is essential to help your children realize that earning money is not that easy but requires hard-work like working for a living, going to the office or more. You can start by teaching them how you as a family earn and help them understand the meaning of a salary. This way, you can help them understand the importance of money which in return would help them become aware that money needs to be used judiciously as it needs to be earned.
(By Mandar Marathe, CEO, Koppr)
