Developing Financial Literacy In Kids
Everybody wants their kids to have good future of course. As such, they want them to study hard, be responsible and be in a position to earn well and to save well a rainy day. It is because of this that it is important to start introducing financial literacy to the kids at an early age and continue to teach them as they grow older.
The first habit of saving is developed right from childhood. Many of us will remember our first piggy banks of course; with everyone loving to deposit money and then occasionally checking how much money has been saved.
Young children have a natural ability to save and love accumulating money in their piggy bank. With this in mind, ensure that you give a cute lockable piggy bank to your kid. If they want to buy anything, one should show them how much money it would cost from their piggy bank.
Parents should also teach them to count their coins and, ideally by the age of four, your child should be able to differentiate pennies, nickels and quarters. They should also be able to understand that a nickel is greater than a penny; a quarter greater than a nickel and so on.
Letting your kids make their own choices is important. If they want to spend money on a single item, let them do it. As and when it happens, they will realize their mistake in spending too much when they do not have any money left to buy something else. This is the best way to learn about budgeting and to recognize the true worth of the dollar.
Parents give money on a regular basis to their kids; this is natural. You can give them pocket money of course, or better still as a reward for completing little tasks. But hold them responsible for their spending, this teaches them life long lessons.
Some ways that kids can earn money includes baby sitting or mowing the lawns. They can also walk the dog or keep a watch on a neighbor’s house when they are out of town. You can be creative in finding ways little ones can earn money.
You can seek your kid’s assistance in helping you with your work if you are self employed perhaps. This way the kid will earn their own money. Children are thrilled at the idea of earning few dollars a week on their own; it also creates a sense of self respect and builds character.
Parents can also start saving money in a small jar or a bottle every day. What is collected should be counted at the end of the year, helping to exemplify how small savings can help take a vacation or do something remarkable perhaps.
Financial literacy is an ongoing process. You may start by teaching your kids how to count coins; graduating to showing them how to save money and how to responsibly spend it. From here, you may teach them budgeting and the importance of actual savings, helping them to be a responsible citizen.
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