More about Money: Financial Literacy for Kids

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financial literacy for kids
Financial literacy for kids is an important way to educated children about their finances and how they should be using them. (Source: GotCredit)

Learning financial literacy is an important part of growing up. It can seem like a daunting task, but learning how to correctly budget and manage money needs to be an integral part of childhood education. Financial literacy for kids is a great way of learning these concepts in a fun, dynamic way. There is plenty of digestible content that makes financial literacy for kids an easy thing to introduce and a fun lesson to deliver to your child. Credit cards, payslips, banks, saving are all concepts that need to be learned and enacted to have a financially stable future. Financial literacy for kids provides your child with the tools to have control of their future finances. 

Financial Literacy for Kids: Banks 

While some children may think this is where the money originates from, banks and banking form an important part of the financial world. Being able to educate children on the importance these institutions play in daily life is integral to them understanding where the money is kept and how they can save more.  Financial literacy for kids helps children think about how they should use their money, when they should be spending it, and when they should be saving it. Showing the benefits of having a ‘nest egg’ and teaching healthy money habits, financial literacy for kids allows them to have more knowledge and control over their future finances. 

Learning how to save should be a top priority when delivering a lesson on financial literacy for kids. Explaining the benefits and the importance of saving money can help make secure and smart financial decisions in the future. Encouraging a piggy bank is a great way of introducing children to the prospect of saving money, but it isn’t overly secure. This allows for a great conversation into how banks work to take place. Setting up a bank account is a great place for children to store money and for them to see their savings grow. If you are explaining financial literacy for kids, then you will have to explain to them that there are many varieties of bank accounts. There are even an array of current accounts available to adults as they grow older. Children who are under the age of eleven can only avail of a savings account, but this is a great opportunity to show your child the benefits of saving any money they might be given or ‘earn’ from doing chores around the house.

Teaching financial literacy for kids by providing them with a foundation on what happens to their money when it is put in the bank is important too. Seeing how interest affects their accounts and grows their own personal wealth is an exciting prospect for any child. Explaining how they will eventually be able to upgrade their savings account to a full current account which has a card and that they will be able to withdraw from ATMs and so on is a huge responsibility. Emphasise that to them. Teaching them to have a healthy appreciation of money and how to use it is important as well. If your children do chores around the house and get pocket money for it, encourage them to save this money up. Rather than spend it on the first thing they see, they can save their money to get something even better. They can put it away for university amongst a host of other options – the world will be their oyster.

Financial Literacy for Kids: Earning Money

Getting a job and earning money is one of the most rewarding things you can experience as you grow older. Learning how to earn money is an important part of financial literacy for kids. Money management can also be taught through the realm of earning money, showing children how they can safely deposit their earnings into secure bank accounts. Starting out with chores is a great way to teach children the value of money. Showing them how to do a specific job and paying for labour teaches them about worth as well – every job should pay a decent wage considering the work that is done. Teaching children the value of money and the importance of work is something that they will carry with them for their whole lives. Taking the opportunity to actually help them grow and learn more about finances and what to do with them will aid them in the long term as well. 

Earnings aren’t always paid monthly. Some payment is made daily, others weekly. This will differ depending on the field of work they are in and the type of work that they are doing. Part-time positions and positions that are casual or freelance often may pay more sporadically than monthly wages that are paid to permanent workers by their employers. Showing children this type of financial literacy gives them a head start and helps them appreciate the methods under which they might receive an income. Instilling the idea of hard work and perseverance is an important skill any parent or guardian can give to a child, and it is worthwhile encouraging them to earn and save money at an early stage of their lives. This type of financial literacy for kids will help them in the long term know how to deal with being paid and where that money should go.

Financial literacy for kids is one of the most important lessons you can deliver to children. Money is a huge part of adult life and most choices are made around the amount in your bank account. Encouraging children to see the value of money, the importance of saving, and being conservative with their spending habits will allow for them to garner a healthy appreciation for money and its uses. This will, in turn, provide them with a healthy credit score and give them options when they are wanting to go to university or make a deposit on their first home. With all these incredible benefits, financial literacy for kids should be an integral part of their education.

 

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