Gone are those times when financial education was just about exchanging a few rupees for candies.
Every parent wants the best for their children, be it education, clothes, surroundings, or practical moral values to do well in life. While most parents want to give the best to their children they miss out on the most important aspect i.e financial education for Kids.
According to T.RowePrice’s 11th Annual Parents, Kids & Money Survey, nearly half of the parents are reluctant and rigid about sharing money matters with their kids. On the other hand, kids want to learn from their parents about financial education. However, due to lack of proper guidance kids end up learning about it the other way round and mostly the careless way. Thus leading to a youth filled with economic burdens like defective credit score, debt burdens, Unnecessary expenditures, and mental sabotage.
To get rid of such horrible experiences, one must understand the utmost importance of financial lessons for kids, and thus inculcate the healthy habit of Financial Awareness in their offspring without being reluctant and rigid. So, Kids, these days should be forged to adapt efficiently to the ecosystem of Money management.
Teach financial lessons to your kids in a way that is deeply rooted in their core values, you must start explaining to them the concept of money. I.e Earning, Spending, and most importantly Saving, Investing Might come as the most surprising element of finance given, that the kid is already aware of all aspects of earning and saving.
Parents, schools, and educators can teach kids about the three major pillars of budgeting, saving, and spending in the right direction to create a strong foundation of financial management among them. According to the Cambridge study, seven years is the right age to include financial education for kids. Similarly, as the English language is necessary to communicate, Financial language is a critical skill for effective holistic education.
Money matters can be quite boring to understand but the right techniques and tools can make it interesting. In this article, we are going to cover the basics of financial education for kids which you can use to build strong financial awareness and mandatory perspective among them.
Learn About The Cycle of Spending And Saving
The early interaction you may see in your kids about money is spending. Children must have money, for they can learn about the importance of money management. So, fix a monthly wage for them once your kids are old enough to understand the concept of money.
Build a habit of saving within your child, not as something mandatory but as a necessity. It can start from a piggy bank or a jar of their favorite color with a few pennies. You can
use sentences like I love to save, saving is a good habit, etc.
The best practice to do with young kids is to develop the sense of small financial goals among them. It could be as small as letting them buy their favorite toy themselves with their saved money and rewarding them in return. These kinds of Practices will help them to build long term financial goals.It is said that Saving teaches goal-setting and planning. It stresses on being prepared and builds security as well as independence.”
Later on, the moment you realize your kid is financially mature enough. Parents must explore the opportunities of debit cards for their kids with parental control. This helps them to teach about money management and delayed gratification along with discipline.
The Good Financial Values
It is never about how much you make, it is always about what you do with what you make. This is what makes a difference.
If you want to develop good financial habits in your kids, the learning should start from within the house. Parents are the first teacher to any kid. For example, you talk about saving and investing to your kid and after that, you take them on a shopping spree. Now, you’re sending mixed messages that might create confusion in the child’s mind. That’s why clear and targeted education should be provided.
Teaching your kid about financial education is not a cohort course, but an everlasting process That needs to be instilled with patience and consistency. The right way to go about it is to teach them about money matters and handle money in front of them, so they can learn and replicate it.
You have to put constant effort and communicate clearly to the child about money matters. It will insist on good financial lessons that will serve your kid.
Create Opportunities To Earn Money
Teenagers can work part-time jobs to supplement their income. Encourage them to begin honing a skill they are curious about, which may or may not grow into a viable job in the future.
In either scenario, taking up a part-time job or a side gig will educate students on how to be self-sufficient, manage their money, and juggle their obligations to school and work.
Part-time gigs not only help to understand the finances but encourage the kid to build a network. Allowing your kids to earn and save money gives them the chance to learn how to use it, which is something you want them to do as they grow up. They learn the worth of their labour when you give them allowances in exchange for chores.
Create A Track of Saving & Spending
Being told to save without being given a reason may seem meaningless to a child. Defining a financial goal with kids can help them become more motivated. Help them divide their goals into manageable chunks if they are aware of what they want to save for. Help them calculate how long it will take to attain a goal depending on their savings rate.
Starting to make a budget would be a wonderful thing to begin with if you want your kid to avoid debt traps. Ask your young ones to keep track of all the outlays they made over the month so you can plan the following one appropriately. Maintaining an Excel spreadsheet may be the best option for older children. Numerous apps enable you to keep track of your monthly expenditures and give you a thorough report on how your hard-earned money was used.
Young children who are raised with good habits have a higher likelihood of becoming financially stress-free adults than those who did not have this type of upbringing. Also, in this process, you need to trust your kid and let them make the decision- whether good or bad. After all, you decide to make them financially responsible, your kid also knows about the consequences of their actions.
Make your child understand the basics of needs vs wants to be followed by spending and saving. For the older kids, start incorporating the lessons for investing through digital apps and banks. Learning how to handle money is a lifelong process. However, the earlier your child embraces good financial habits, the more likely they are to find financial success.
