The need for financial education for children is increasingly discussed. For a long time, money was a topic excluded from the educational routine of the little ones. However, it is essential that this subject is included in the day-to-day children's learning because in this way we will form a society of more conscious and financially responsible adults.
For those who want to teach important finance concepts to children, but don't know how we've gathered precious tips. Read on and discover how to insert this knowledge in a playful and relevant way in your children's lives. Talking about money today with kids avoids a lot of problems tomorrow.
What is financial education for children?
Financial education is nothing more than developing a healthy relationship with money. The individual who learns from an early age to manage his resources has greater control over his finances. This concept goes far beyond teaching how to accumulate wealth. It is about directing them towards a more conscious use of money, in order to positively transform their reality.
With financial education learning, the child of today becomes the adult with the quality of life of tomorrow. The person understands how to save and how to organize to accomplish goals and projects. This learning can be taken to the children's universe on a daily basis.
Here are five tips for educating children about money
Now that we have explained the concept of financial education for children, we are going to present tips on how to insert it into the routine of the little ones. Let's start.
Tip 1 – Lead by example
One of the main desires of children is to be like their parents, that is, to act as they act. Thus, the first tip for teaching financial education to your children is to be an example of a financially responsible person. Families that have a healthy relationship with money are able to pass this idea on to their children.
If on a daily basis, parents make impulsive purchases and complain about debts and overwork, they transmit negative messages to their children. On the other hand, when children see their parents organizing finances and saving for good times, they understand that it can be good to relate to money. With children, the “do as I say, not as I do” does not work.
Tip 2 – Use allowance to teach finance
Giving children an allowance is a practical way to teach them how to manage their finances. The idea is simple, parents must stipulate a monthly amount that will be given to their children. Children and adolescents must decide how they will use this value. For younger children, it works better to adopt the “weekly” or “fortnightly” model.
The smaller the child, the less notion time he has and, therefore, the deadlines should be shorter. Managing your 30-day finances can be tricky. Having their own money makes the child discover the value of resources. By paying for something with her allowance, she understands the difference in value and the importance of knowing how to research before closing a deal.
It is also a way of teaching priority setting. In adult life, it is essential to understand that some expenses are more essential than others. In addition, receiving an allowance presents the child with the possibility of saving money. The allowance is not always enough to buy what you want, so it will be necessary to save.
Parents must commit to not giving more money than their children's allowance. Hold back the urge to complete the amount needed for a purchase, as your child needs to learn to value money.
Tip 3 - Teach the importance of saving
Giving your child a piggy bank is a way to encourage them to save. The child can store banknotes and coins in the piggy bank to buy something specific. When your child asks you for a toy, for example, you can tell him to keep money in the safe until he can make the purchase.
The idea is to teach through habit, that is, the child discovers through the action itself how much saving can be positive. In this system, the young finance apprentice understands that sometimes we need to put off something we like in order to make another dream come true.
The piggy bank can also serve as a tool to teach about investing. Parents can offer their children the possibility to double their money if they manage to save X amount in a certain period. This is a great way to simulate an interest-earning investment.
Tip 4 - Teach the value of money
Money can be a very abstract topic for children, so it is important to teach them the value of money in practice. One way to do this is to talk to the little ones about family purchases. Avoid giving everything your kids ask for, especially when there's no budget for it.
Have a firm stance and talk to the child so that he understands that money is the result of effort and work. Your child will only understand that buying everything he wants is not so simple when there is a conversation about it.
One way to bring this topic into a conversation is to offer options to the child. Ask her if she prefers to eat ice cream or go to the movies, and make it clear that when you choose one, you can't do the other. Understanding that money has limits is crucial for the child to become a financially balanced adult.
Tip 5 - Teach in a playful way
Is there anything children like more than playing? This playful activity is fundamental for the learning of the little ones. During playtime, it is interesting that parents take the opportunity to talk about serious things, such as financial education. Games that use toy money and that simulate life events are perfect for this.
Family fun moments are essential to understand concepts that might seem abstract. Play with your store child, for example, he can be the salesperson and you the customer. Put prices on the products and, if you can, make joking notes to establish the purchase negotiation. You can merge the roles of customer and salesperson.
