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Financial Literacy for Kids
Did you know that every year on 24th April, there is a day observed as ‘Teach Children to Save Day”? This day reiterates the importance of helping kids all over the world to understand the concept of financial literacy from a young age. As parents, it is our role to teach our children about the values of managing money. A keen mind attuned to the benefits of financial savings is an important parcel of their growth journey and one that will be highly beneficial to them in the future.
Here are some ideas that parents can take into consideration to teach your children about the importance of saving money that they can easily understand!
- Devise a realistic situation
When it comes to children, they may not easily grasp concepts that are not part of their everyday lives. As such, they may not understand the reasons behind the importance of financial literacy. The goal here is for parents to educate their children about such values by sharing stories and situations that may possibly happen in a time when overspending occurs, and explaining the differences between wants and needs.
- Give them opportunities to manage money
Giving your child a real experience to manage their own money allows them to better understand the process of budgeting and saving money. As a start, get your child to complete house chores on a weekly basis, in exchange for a set allowance. With this, children will better understand that money is earned through work and value, and not merely given.
- Teach them about budget and saving goals.
Teach them the importance of maintaining a monthly budget so that they better understand the concept of managing money and how they can be organised about it. As a parent, your child (or children) looks up to you as role models and will often follow suit in your actions.
A fun activity to try out with your children can be getting them to plot their own budget sheet based on their allowance and guide them to save up for something that they really want. Talk to them and explain the process of how saving for items that they want takes time. This method has the added benefit of teaching them how to be disciplined and focused.
- Provide a dedicated space for their savings
With a physical, dedicated space (i.e. a glass jar, or a box) to store their savings, children are able to visualise how much they have saved and will remain motivated to save more to reach their goals. Take this time to explain to them that the more they save, the greater the amount of money they will accumulate over the years.