5 Reasons Why You Should Teach Kids About Money at an Early Age
When they say money makes the world go around it is indeed true. Just like English is the global language of business so is money.
Money is the most utilized commodity globally but it is at the least prioritised conversation in our education system.
As women, we make daily decisions about money, whether in our personal capacity, within our chosen careers or within our businesses, however, we rarely have money conversations with our children.
It is important to teach kids the basics about money and the importance of the value and the managing of it. The simplest way to start is by having conversations that assess what their perception and thoughts on money are, ask them questions like :
· What do you think about money?
· If I gave you money what would you do with it?
You can:
· Talk about real – life money scenarios in your household so the kids can relate.
· Involve them in some money conversations within your household.
· Ask them for advice regarding some decisions that concern money
All these tactics will give you an idea of how your kids perceive money. This will allow you to start teaching them money lessons that will yield positive financial decision - making habits. You can also find a financial literacy programme like FitFinance that will help you and make the journey of educating your kids about money easier.
These are the reasons I started Fitfinance and why you teach your kids about money at an early age :
1. Budgeting Skills
Budgeting skills teach kids to prioritize their spending based on importance, differentiating their spending between needs versus wants. This will make sure they make spending decisions that are within their means.
2. Saving habits
Always stress the importance of saving before spending. What will help is teaching the kids to have financial goals that they’d like to achieve like buying a new game. This would mean they have something they desire that they need to save towards in order to purchase it.
3. Financial dependency on parents
As your kids grow and learn to be financially savvy they become financially independent sooner and as a result financial dependence on you as parent decreases.
4. Economic benefits and social responsibility
Let me put it this way, kids that grow up understanding money and experiencing money making decisions that is fostered throughout their lives to young adulthood will be in a position to make positive financial decisions in their personal lives. Human being are creatures of habit, learning good money management habits will have a ripple effect into their careers and workplace as well their own businesses.
5. Effects of lack of financial literacy
Means the vicious cycle of financial decisions that have a negative impact will continue to be made by our kids when they reach adulthood such as not budgeting, lack of savings and investing, increased debt and as a result our kids become unproductive members of the economy and society as they will not be in a position to assess financial risks and opportunities.
Teaching kids about money is an important life skill. We are required to make decisions about money daily. I encourage that you to teach your kid about money at an early age. The more financially savvy your kids are the more healthy financial decisions will be made throughout their lives which will impact their lives positively.
About the author : Ms. Neo Salemane the founder and CEO of FitFinance is an entrepreneur who is passionate about the education of financial literacy among the young and old. She holds a B Comm Marketing & Communications degree from University of Pretoria, a Management post graduate Degree from Wits Business School. She has 12yrs experience in the financial services industry which inspired her passion to develop the FitFinance financial literacy programme aimed at educating the children of South Africa about finances to better equip them for their future.