Financial literacy is not included in the syllabus for children and young adults. It is a necessity to educate them in financial fundamentals at an early stage and start saving significant amounts for various activities like buying a new house, higher education, foreign trips, and retirement.
Several children enter their adulthood without knowing how to save and manage their finances. Giving financial literacy to them is a purposeful and continuous financial management. Joseph Stone Capital is one of the pioneers in educating children in fund management and financial basics.
Know how money works
Children need to know about the working of money and how to save it at regular intervals in small chunks for a brighter future. Money is important for all of your daily transactions. You need money to pay for food, clothes, health care, education, entertainment, air conditioning, heat, gift-giving, child-rearing, insurance, etc. So, every child needs to know about fund management to achieve success in life.
According to a recent survey, almost 50% of parents worldwide fail to teach the value of money and its benefits to their kids. Some parents are unwilling to share financial topics with their kids. Kids are interested to learn about money and achieve wisdom.
Teach kids through storybooks
You need to teach your kids about financial basics before the age of seven. The storybooks can be utilized to teach money-saving habits and their value. You can introduce cash and coins once they are old enough. It is necessary to tell them what money is and how it can be saved and used when in need. You can tell them how to shop using money.
In the modern era, you may be making purchases using credit or debit cards. You can involve them in your purchase process so that they understand how money works in their day-to-day activities. You can show the receipt to your kids. You can repeat this process so that it will become a habit for your children. The stories in the storybooks should be tailored to teach them about the basics of finance and how to manage their funds. You can seek the help of talented financial professionals at Joseph Stone Capital in designing the financial basics-based stories and money-saving techniques for your kids.
In some schools, teachers tell the kids to open a savings account in a nearby bank and deposit small amounts of pocket money in that account. It creates a savings habit at a much younger age for kids. You can also teach them to withdraw some cash for their toy purchase when a substantial amount is saved in their accounts. It gives them an idea of how money works for them.
Saving jars to save coins
Saving small sums instills confidence and security in kids. Apart from opening a savings bank account, you can also give them a savings jar to deposit their coins for use at a later stage. The parents should encourage their kids to save pocket money and set short-term targets like the purchase of clothes, kids’ computers, and stationery.
Create an opportunity for kids to earn money
Kids should start making their decisions with the money they saved or earned. You can teach them to make small toys using unwanted items in the home and sell them online to earn some money. You can also tell them how to sow seeds in your backyard and grow vegetables and fruits. It can be used in your house. You can pay them small amounts for their activities. The vegetables can also be sold online to earn some money. It helps them know how to make money at an early age. You need to do all these activities as a play and not as work. Otherwise, children do not show interest in gardening and other chores that earn small sums.
Make a habit to help others
You can also tell your kids to use their savings in the savings jars to buy pencils, pens, books, and sweets and give them to their friends. It creates a friendship bond with fellow students. They will also learn social skills in helping others in need. Teaching finance basics and fund management to your kids takes some time and you should be patient and provide good storybooks and lessons to craft them to stand on their legs.