We’ve all heard that learning a new language as a kid is considerably simpler than learning as an adult. That is also true in terms of financial literacy. Nonetheless, it has been seen that despite understanding the importance of having financial literacy in life, not many parents step ahead for teaching the same to their kids at the right age.
Now, if you see, you were undoubtedly aware that you would have to educate your kids to speak, ride a bike, and perhaps share his/her stuff with others. But did you ever think you’d have to educate your kids about money as well? Don’t worry, because even if you didn’t, you’re not alone in this! According to a 2018 survey, 45% of young people are “financially in danger.” This shows that not many take it seriously to imbue their kids with the necessary financial know-how.
In fact, a vast majority of individuals can’t think of a single money lesson they didn’t learn the hard way. And that’s because they failed to receive the basic knowledge of financial transactions during their childhood years. So, in this article today, we at Gurukul The School, one of the Best cbse school in ghaziabad , would like to share with you all a few ideas and methods in this regard that will help ensure your children develop into financially successful people. Read on.
- Begin Early
It’s not only a matter of fantasizing about the currency notes; it’s also a matter of getting started as soon as feasible. It is ideal to begin discussing money with your children when they are five or six years old. It may simply be the basics at that age, but kids must learn that things cost money and how money is produced and used. Also, open a basic savings account in your child’s name so they can learn how to utilize it.
- Give Up Control
Allow your children to perform chores independently. Allow them to deposit and withdraw funds from their bank account (with your help). Allow children to make their purchases with the money they have, whether it’s money earned through particular tasks or money given to them by Grandma. Allow them to decide how to spend their money. Allow them to do the job on their own while providing advice. It’s a simplified and safer form of learning by doing.
- Set Limits
It would be best if you establish boundaries when discussing money with your children. So, while you begin early and give them some power to utilize their money, also allow them to make errors as that is how they are anyways going to learn. But yes, set limits to bound their mistakes to small-scale learning. The key is to set money limitations high enough to teach children critical financial concepts but not so high that they think money is unlimited. Allow them to practice making choices based on budgetary limitations.
- Teachings should be meaningful
Finally, make sure your teachings to your children are well-structured. A structure will help them understand the basics better, and they may even surprise you with a clear saving and spending plan. This will not only help them become intelligent consumers but will also ensure that they grow into financially responsible and stable adults. But all this will happen only when you start early and follow the teaching and practice method.
The Risks of Not Teaching Your Children About Money
We just saw the key benefits of imparting financial know-how to the kids. However, if in case, you don’t teach them about money management at the right age, it may also impact them adversely. They may grow financially reckless, have weak money management skills, and might eventually accumulate significant debt. Alternatively, if they are not taught about money management during their growing years, they won’t be able to understand the value of money and the hard work and efforts that go into earning it.
Many think that childhood is not the age to teach children something as complicated as money management. However, we, at Gurukul The School, one of the Best cbse school in ghaziabad, firmly believe that the right age to teach them about money, its value, and management is indeed the childhood years. That’s because childhood is the time when the young minds are most porous. As such, when the principles of financial management are taught to them at this age, they actually attain a far better understanding of the concepts than they would during the grown-up years. So go ahead and take time out to assist your children in being financially sound. Trust us, this will help them a lot in the future!