As a parent, you need to help your children in making wise and valuable decisions especially in the area of finance.
Below are a few tips you can use to teach children simple financial literacy.
Differentiate between wants and needs to them: Children barely know beyond ‘Mummy please buy this, Daddy please buy that for me.’ So you need to instill in them that wants are insatiable – that is, they can never have everything ever imagined. Rather than ask for things they can do without like loads of candy, extra decor for their room etc., they should ask for their basic needs.
Needs are things they can not afford to live without, such as food, clothing, etc. For example, having a birthday party without a cake seems almost impossible to kids but it can be done without. The point here is; break down the stories or explanation in ways they will understand and let it be age specific.
Let your children earn their money: You can pay them for certain chores (note: not all chores should be paid for. Our children must learn to contribute their quota to the growth of the family). I pay my boys for reading the extra mile and this is age specific. So for every extra book outside their normal reading plan, they earn. This is a win win solution for me since they get to read and get to earn!
Let them manage their spending especially from the money they earn: Let them draw up shopping list and budgets with you. It will reinforce their learning. It will also let them decide what to forgo in their list of wants and needs if they realize that their money will not be enough to purchase certain things.
Discuss financial matters with them: carry your children along in your small small finances. Let them learn and play financial literacy games such as monopoly. It is no doubt that children love creativity and visual means of learning. The kind of impressions you give about financial education has effect on their knowledge. So it has to be fun for it to stick.
Be financial literate and set a good example: Yes, mum, you have to know these financial hacks yourself. You can’t give what you don’t have! And that is why we are here for you. To take you through money management and financial independence.
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