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How to teach financial literacy to Kids?

No doubt, parenting is a tough job but one or the other day we do that in our life journey. No one teaches us about that. It is the personal experience of one’s life. Similarly, our kids have to make basic financial decisions in their life at some point of time. They have to make wise investment decisions ahead to be successful in life. With proper skills and knowledge about how to use money wisely at a young age, they can have good financial success in their lives.

Investing is one of the abandoned component in the school curriculum of our children. This means learning fundamental basics of finances by kids in terms of --- saving up allowances, controlling impulsive buys, finding ways to make money through chores etc

Teaching English language is important and teaching financial language is as important as teaching English. In simple terms, it means the usage of money further for getting income or profits. As a parent, it is our basic responsibility to teach them to inculcate financial literacy among them and if we are not doing so, we would be the ones behind their unsuccessful future. So the question is how?

Financial literacy is important for them to make financially responsible decisions in their life which is very important given the pandemic scenario. Our children should understand money management in terms of planning, sensible spending and accounting etc. They should have the answers to the following questions:

 

From where does the money comes?

How to earn it?

How to save it. i.e the role of banks etc.

How to invest it further making allotments in different buckets.

This will teach them good money habits.

                              

https://youtu.be/ObeQI32MZeA

Talk about money with them. You can start by basics of investing. Our children should know the basic difference between “needs” and “wants”. There is a very thin line between needs and wants. They should be able to figure out the difference between them. It is the crucial aspect of managing the finances. They should be able to make valuable judgments regarding their expenses and income.

  • Discuss their demands and ask them to prioritise them on the basis of importance and urgency. Then ask them to take the required action.

  •  Ask them to earn and then shop. Involve them in the household chores in exchange of money. This way they will understand the power of hard work and money. They should make their own budgets.

  • Play games like Business and Monopoly with them. 

  • Make a wish list with your child. And involve them in the major purchases.

On the other hand teaching them about contentment is important too otherwise they will end up becoming greedy ones. Teach them not to get emotional while watching advertisements and not to become impulsive buyers as this can lead them in making hasty decisions in life further which may provoke financial distress.

So, in the nut shell, they should learn to plan, save and budget from personal earnings and allowances.

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