The knowledge and skills on how to deal with money are far from being innate – everyone should be taught from an early age how to count money and how to manage them correctly. Studies confirm that people who were not thought how to deal with money in young age do not have appropriate skills how to teach their kids money management.
But how to teach children such a challenging aspect of life?
How to produce financially literate person
- Start to give your child pocket money before he starts going to school.
- Involve your child in the family budget planning, so he understands why that amount of money is given to him.
- Determine when and how much money the child will get – do not rush to give more money if they spend it quickly, encourage him to save.
- Watch and discuss how and where a child spends pocket money.
- Introduce a child to technology, so he understands that the money is not only bills and coins, which lie in a wallet or piggy bank.
Once is not enough to learn
Financial literacy is not a few never unchanging rules, which can be used by any generation of parents and children. Financial literacy principles are influenced by the environment: technology, new products or services in the market and even economic events.
The technology significantly speeds the changing of daily family life – planning, saving, shopping, online couponing (the best example of that – the amazing internet online coupons platform ChameleonJohn.com) and other habits. Probably five years ago it was hard to imagine that the accounts and payments will be transferred via your smartphone, and the children will be able to use credit cards in the same way as adults.
So, parents who want to teach children to behave responsibly with money should start to familiarize their children with the latest technology. Shortly that will be an integral part of the everyday financial life
Calculate – from an early age
A few recently conducted studies show that more than half of pre-school age children of parents (57 percent), who in childhood was taught how to handle money, communicate with their children more often and tell how the money is earned. At the same time, parents who did not receive such knowledge in childhood, teach children to count money (42 percent.) or do not talk about money at all (37 percent.).
Thus, financial literacy should be taught exactly like cleaning the teeth. And this requires the use of technology too – after all, we live in the twenty-first century.
Pocket money – not necessarily in cash
At this point, perhaps, it would be difficult to find a middle-aged man who lives according to the Stone Age finances – does not use online banking, do not have credit cards, and hides cash deep in a drawer.
Technology for children is super exciting. Also, they are often even more familiar with that than their parents, and through you can use it to encourage children to learn. And there is no need to believe in prejudices or stereotypes, that all technologies are harmful in one way or another.
Each family who is seeking to prepare their child adequately for an independent life should rethink pocket money and traditions too. The latest capabilities enable parents to transfer pocket money using your smartphone, open an account or remove a payment card. Also saving unspent pocket money they can be not only in a piggy bank but on the account too.
Such measures provide more opportunities to monitor the child’s progress dealing with money. After all, pocket money is an important part of education, so parents should be able to assess and monitor how the child deals with them. Also, parents sometimes feel calmer because the child does not need to carry a lot of cash with him.
It is more important not how much, but how
We tend to think long and hard how much money should be given to the child. The universal response, suitable for every family, indeed can’t be found – the amount depends not only on the age of the offspring, but also on the family’s financial situation, and other circumstances.
One of the best lessons for children about financial planning is his involvement in the family budget planning. At the same time discussing the needs and capabilities, parents can help to explain why such amount is given as a pocket money, so the offspring is taught to understand that the budget is limited, and the money does not grow on trees.
Wow, this is awesome! Building a good financial foundation for yourself is really difficult, especially when you’re young, but it can be done. Thanks so much for sharing your tips! Enjoyed reading this!