- 14 Feb, 2024
- 0 Comments
- 3 Mins Read
Financial Literacy for Kids – Growing Beyond the Piggy Bank
Are you a parent who thinks Financial Literacy is a skill that can be mastered after your child grows up? Read on to discover why it is just as valuable for kids as other life skills. Financial Literacy for Kids is all about teaching them the fundamentals of money management and achieving the perfect balance. By starting early and fostering positive saving habits, we can empower our children to make wise financial decisions in the future.
Basics of Financial Literacy for Kids
The Great Coin Adventure – Show them how money works
You can start with the basics of money management for kids – how we need to work to earn money and how we use it to buy things. An easy way would be to relate it to your job, how you get paid every month, what your expenses are and how you set aside savings for the future. With cashless transactions being the norm today, it is essential to teach kids about debit and credit cards when they are older.
From Small Change to Big Dreams – The Power of Saving
Get your kids a piggy bank and teach them to save. You can help them set a savings goal for a new toy. Celebrate when they succeed. Also, you can make them understand the difference between having a treat now with the money they have saved or saving more for a bigger reward later.
Skip the Allowance – Teach Kids the Value of Earning Money
We can make kids do age-relevant chores and then pay for them for doing those rather than giving them an allowance. When the money offered varies based on the difficulty of the chore, it adds more fun and makes kids responsible too.
Planning for Big Fun – How Budgeting Makes Wishes Come True
Make a list of things that your kid wants. Help them create a budget with the total savings they have and the cost of each item on the list. When they are short of money, assist them in prioritising the list and buy only what they need. They can set savings goals for the rest of the items. This way you can explain how to spend within the income and avoid going into debt.
Mastering the Needs Vs Wants Game
A simple way to explain needs and wants to kids: Needs are what we can’t live without, like food and clothes; Wants are things that are nice to have, like toys and treats. It is difficult for younger kids to understand the difference initially but it will help them overcome peer pressure in their teens and beyond.
Show, Don’t Tell – Money Lessons Kids Learn from You
As parents, we need to lead by example, being too stringent or extravagant in spending can cause them to pick those too. Children observe how we discuss money-related topics within the family and also with friends. It is best to avoid addressing financial issues which are not relevant for their age in their presence.
Become a Smart Shopper – Avoid impulse purchases
When older kids are adamant about impulse buys, ask them to spend some time doing research, reading reviews and then deciding whether or not to buy. We don’t have to be too strict to follow this, but introducing this gradually to them will make them pause a little and weigh their options before making any impulse buy.
Beyond Self – Embracing the Magic of Giving
We have all been stressing the importance of charity to our kids. It helps them have a more fulfilling life and a stronger bond with family and society. It can start with the simple joy of donating the toys and clothes they have outgrown or contributing a portion of their piggy bank to charity. This will help them grow socially responsible and make the world a better place for everyone.
Financial Literacy for Kids can be made fun and engaging by having family game nights with classics like Monopoly and The Game of Life. And there are plenty of great books that can help kids learn about money management. It is never too early to start teaching kids about saving and budgeting. Go beyond the piggy bank and prepare your child for a bright future!
Here’s a short video explaining the basic financial terms like income, expense, and savings for kids
