With so much buzz around financial literacy, you’d obviously wish for your child to learn the basics. You, as a parent, would certainly want the best things for your child. Of course, this doesn’t mean that you’ll bestow them with the nicest clothes, the coolest gadgets or exclusive toys. However, what you essentially wish for them is to be safe and secure. Eventually, you’d want them to lay a foundation of their own that can help them sustain without financial crisis.
We don’t need to remind you of how tough it was for you to learn about different investment methods, money management and taxes. You’d definitely not want your kid to spend their adulthood figuring out these basics. Thus, the obvious question that arises here is that are you making your child financially literate? Are you teaching money habits to them yet? If not, this article is your go-to guide.
Great leaders have practiced and preached it time and again that without a working knowledge of money, it is extremely difficult to do well in life. If you come to think of it, money is central to transacting life. From buying food for lunch to paying electricity bills, money is one functional unit of life that can’t be ignored. Thus, when money revolves around so much in our lives, shouldn’t we help our kids learn of it as early as possible?
To shape your child’s mind about the value and virtue of things associated with money, you need to gift them the benefit of appropriate financial literacy early in life. Here’s how you can begin.
Start With Basics Early In Life
It has been found that the earlier you start making your child financially literate, the better the child tends to do in life. Above the age of seven, lessons on money habits and approaches can be given to children. In fact, once your child is old enough to not swallow coins and understand their purpose, you can start imparting lessons on the same.
Explain what money is and how it makes life easier. Also explain the importance of money and how things are bought and sold with the help of money. Allow them to pay the cash sometimes when they visit the local store with you.
Instill The Habit of Saving Money
Cute piggy banks were a good option until a few years ago. To keep up with the fast paced world and the constantly evolving times, you need to teach your kid necessary money saving habits. You can start by opening a bank account for them so that they can be more engaged and curious about their newfound adult-like experience.
Teach them the importance of saving money through day-to-day activity that when done carelessly can rob people eventually of their wealth. Teach them about the meaning of discounts and savings advertisements in newspapers and magazines. Tell smart stories on saving money and what can happen if they don’t.
Do Not Kill Their Curiosity
You know your child is interested when they start asking questions about something. When it comes to money habits, do not push them off labeling their questions as silly and pointless. Take the time to explain things to them. The more you fuel their curiosity, the more they will be interested to learn about finances.
Eventually, there might come a time when your child learns new things about money that you took decades to know of. As a consequence, they’ll start a side hustle or support you in doing so.
Create Opportunities To Earn Money
The best way to learn something is to do it practically. When it comes to financial literacy and money habits, encourage your child to earn money gradually. Begin with creating opportunities for them to earn their pocket money. Not only will this help them learn about the importance of money but will also teach them the necessary money management skills that will grow over time.
Involve Them In Decision Making
Responsibility motivates like nothing else. When making important decisions about finances, let your kid participate and share their opinions. Even if they do not have anything fruitful to add, they’ll certainly learn a lot from you and the others present in the discussion.
As they grow up, entrust them with responsibilities to bring up their viewpoints on certain decisions. This will encourage them to do their own research and come up with effective strategies that can prove to be beneficial.
Besides these little acts towards a financially literate future, make sure you do not forget to teach your child to stay humble and grounded regardless of how wealthy they aspire to become. Make sure they have a habit of helping those in need.