Financial literacy is the key to making successful financial decisions. So, it is essential to teach kids from the start about making mindful financial decisions instead of relying on them to learn about it at a much later stage.
With this article we will outline a few tips that can help in educating kids about financial literacy and create the much needed awareness.
Differentiating between needs & wants
It is vital for kids to be able to differentiate between needs and wants at a young age. This will help them to get their priorities right. Building this awareness will ensure that kids put their needs before wants whenever the need arises.
Money is not unlimited
Creating an activity about this tip will surely help in the learning process. Making the kid spend money on their own and choosing items according to the budget they have will teach them that they can’t just acquire everything that they like, they will have to make choices.
A helpful way to let kids earn money is to create any small opportunity and pay them for it. This was they will get familiar with the value of hard earned money and also learn about how the system of earning income works.
A Bank Trip
Take your kid to the bank along with you someday to educate them on how a bank account works. Explain the banking concepts by breaking it down into easy and digestible information for them. You can even open a junior saving account for them so that they get some sense of interaction with a financial institution from the start.
Another essential tip is to teach kids saving a percentage of their pocket money and keep it aside every month. Make them utilize those savings by reducing the pocket money for a month or so citing a reason such as an emergency or reduced income situation. This will make them realize the importance of saving money in good times to be used in bad times.
Not being able to align finances in an organized fashion is an extremely problematic situation for a vast majority of adults in today’s time. In order to save the next generation from making the same financial mistakes, it is important to teach them about finances from a young age. As adults, we are responsible to raise a generation which makes better money decisions when they grow up and generally have a better financial know how. This will not only help them achieve financial security but will also help our country thrive financially as well.
Reference Info graphic: https://www.jbirneyfinancial.com/blog/infographic-financial-literacy-children