As parents, naturally you want to do what is best for your children. However, this does not mean that you want them to have the best toys, best house or best clothes. What you really want them is to be safe and secure. To do so, you want to lay a solid foundation in financial literacy that they can build upon to succeed in life.
A survey known as 11th Annual Parents, Kids & Money survey has found out that almost half of the parents surveyed said that they miss chances to talk to their child about money and finances. While a quarter were reluctant to discuss financial topics with their children.
Kids, however, want their parents to share their knowledge on money matters. Half of the children surveyed said that they wanted their parents to teach them more about money. But how can parents start teaching children financial literacy at a young age?
Here are some methods and ideas you can put to use. Once your children are old enough, say about seven years old, to know that they should not be eating or playing with money, you should introduce them into the terms of coins and notes. Explain what money is and how to use it. However, it is more effective to show them how money works. For example, when you are purchasing food from a hawker centre let them in on how the process works. Even if you are utilising cashless payments, you can still explain to your child that although they can't see it you are still using money to conduct transactions.
Another idea you can use is to cultivate a habit of saving with your child. Most of the time, your child’s first few interactions with money is to spend it. They watch you buy things, including things you buy for them. Thus it is essential to teach them from a young age that money is not just for spending and they need to save it too. One way to help them get into the habit of saving is to get them a piggy bank where they can stash coins or notes into. With young kids, your first goal can be to tell them to save up for a short term goal, for example maybe a toy they want to buy.
Another method to use is to give your children opportunities to earn money. To learn how to make decisions in terms of money, children need to have some of their own. Thus a weekly or daily allowance can accomplish that. Some other examples of giving your children opportunities to earn money are things like washing the family car or going to run errands.
But if you want your child to develop good spending and saving habits, they need to also see that you are upholding that image. Parents have to practise what they preach to make this financial literacy teaching really impact their children. Teaching your children about money is a process that takes time. However, if you put in the effort and constantly talk about the importance of money, you will be able to create good financial awareness in your children.
References
Huddleston, C. (2021, June 28). How To Teach Your Kids Good Money Habits. Retrieved from https://www.forbes.com/advisor/personal-finance/how-to-teach-your-kids-good-money-habits/
T. Rowe Price. (n.d.). T. Rowe Price's 11th Annual Parents, Kids & Money Survey. Retrieved fromhttps://www.slideshare.net/TRowePrice/t-rowe-prices-11th-annual-parents-kids-money-survey