Financial literacy and money management are skills that apply to everyone throughout their lives. So it’s only best to begin teaching your children early and give them an advantage for later in life.
Here are some suggestions to help raise a financially literate child:
- ‘Needs’ vs. ‘Wants’: Teaching children the difference between needs vs. wants helps them set priorities for spending. Making a shopping list (and sticking to it) and explaining the reasons behind each item purchased will reduce their desire to buy things on impulse.
- Show Them How To Budget: As mentioned in a previous post, there are many free budgeting apps available for mobile phones. Using one of these apps with your child makes learning money management a game, can create a sense of pride, and is something to look forward to doing together.
- Teach Them How To Save: Whether they earn money from an allowance or employment, showing kids how to ‘save-up’ for a video game, a fun experience, or something bigger is very important. The ability to set goals and work towards them is one of the most crucial skills children need, and is most easily taught using money.
Like reading, writing and arithmetic, financial literacy is an essential life skill. And teaching your children is also a valuable way to grow and reinforce your own money management skills, too.