How to inculcate basic financial literacy in children
How to inculcate basic financial literacy in children
The evolution of parental tutelage has achieved a frenzied pace. Children’s lives are vastly different from what they were just a few years ago. As if the times weren’t changing fast enough, social media and the tech industry at large have pushed the boundaries further. All this makes it quintessential for parents to teach their children basic financial literacy.
The consumption economy incentivizes poor financial choices. Frivolity and excesses are deemed natural by brands and influencers on social media. Online marketplaces do serve needs but create an insatiable desire for more. A child acting alone on these platforms is a vulnerable being that needs to learn good money habits.
This is not an alarmist message deterring you from innovation. This is rather an attempt to highlight just how important it is for parents to teach their kids about finance. Money is everywhere, and its knowledge is no less important than grammar, or arithmetic, or the lives of microorganisms.
Besides, you are not alone if you don't like talking to your kids about money. The following pointers are designed to help you initiate the process.
Fix the barriers
Parents must step out of the traditional role of caregivers and embrace determined instructional responsibilities. School curriculums are yet suffering from a dearth of materials on financial literacy. The modern-day also allows for greater economic opportunities due to widely available credit, blockchain, cryptocurrencies, and related developments.
Children as old as seven are capable of learning the basics of money: savings, budgeting, and spending. While teens can be introduced to the world of financial markets, and important topics like inflation and macro-trends. Explain your intentions clearly, and ease into the process thereafter.
Inculcate healthy habits
Build a culture around savings. Impress upon your children the advantages of compounding and how money makes money. Children form their outlook towards money independent of their parents. Ask your child if they’d like to have one candy right now or three tomorrow. Their answer might be an indication of their future money behavior.
The time a parent spends with their child can significantly determine if an early predisposition will translate into a problem later. When giving lessons about wise spending habits, take care to not go on a shopping spree or lavish your child with gifts. Explain your own financial choices and habits to lay out the advantages of a disciplined life.
Promote enterprising undertakings
Concepts like income and the importance of having a steady cash flow can be depicted by real-life exercises. Try giving your children small tasks in exchange for an honorarium. Promote entrepreneurship or just a basic understanding of business by explaining the motives behind marketing campaigns and value systems.
You can also consider enlisting help from an interactive medium. There are plenty of fintech start-ups working in financial literacy for school kids.
What’s in it for you?
Besides being a good parent, making your kids financially literate is also about shoring up your own knowledge. This is parenthood's way of offering an opportunity to better your financial discipline and become a role model for your kids. Be a part of your child’s financial journey and come out a better person yourself.
You must make sure to keep the process fun and engaging. Finance can quickly become boring for a kid that’s yet to enter the world. But with your help, children can do much more than just learn about finance. They can maneuver it to their needs, and bend it to their plans. And who knows? Maybe your child will become a top investment advisor as well.
Disclaimer
This blog is meant for educating people about the importance of the right financial planning. The opinions expressed in the Blog are for general informational purposes only and are not intended to provide specific advice or recommendations for any individual or on any specific security or investment product. It is only intended to provide education about the financial industry. Consult your financial advisor to get personalized recommendations based on your life circumstances.
About Rajiv NairRajiv Nair co-founded Finshield Investment Advisors after successfully managing several large clients and businesses in the financial services industry for over 15 years. Rajiv is a Certified Financial Planner who believes – ‘Any amount of effort in wealth management is worthless if at least a part of it is not usable within your lifetime’. He is known to be steadfast in his Investment philosophy and an avid reader on diverse subjects. Learn more about him here Rajiv Nair | LinkedIn
The evolution of parental tutelage has achieved a frenzied pace. Children’s lives are vastly different from what they were just a few years ago. As if the times weren’t changing fast enough, social media and the tech industry at large have pushed the boundaries further. All this makes it quintessential for parents to teach their children basic financial literacy.
The consumption economy incentivizes poor financial choices. Frivolity and excesses are deemed natural by brands and influencers on social media. Online marketplaces do serve needs but create an insatiable desire for more. A child acting alone on these platforms is a vulnerable being that needs to learn good money habits.
This is not an alarmist message deterring you from innovation. This is rather an attempt to highlight just how important it is for parents to teach their kids about finance. Money is everywhere, and its knowledge is no less important than grammar, or arithmetic, or the lives of microorganisms.
Besides, you are not alone if you don't like talking to your kids about money. The following pointers are designed to help you initiate the process.
Fix the barriers
Parents must step out of the traditional role of caregivers and embrace determined instructional responsibilities. School curriculums are yet suffering from a dearth of materials on financial literacy. The modern-day also allows for greater economic opportunities due to widely available credit, blockchain, cryptocurrencies, and related developments.
Children as old as seven are capable of learning the basics of money: savings, budgeting, and spending. While teens can be introduced to the world of financial markets, and important topics like inflation and macro-trends. Explain your intentions clearly, and ease into the process thereafter.
Inculcate healthy habits
Build a culture around savings. Impress upon your children the advantages of compounding and how money makes money. Children form their outlook towards money independent of their parents. Ask your child if they’d like to have one candy right now or three tomorrow. Their answer might be an indication of their future money behavior.
The time a parent spends with their child can significantly determine if an early predisposition will translate into a problem later. When giving lessons about wise spending habits, take care to not go on a shopping spree or lavish your child with gifts. Explain your own financial choices and habits to lay out the advantages of a disciplined life.
Promote enterprising undertakings
Concepts like income and the importance of having a steady cash flow can be depicted by real-life exercises. Try giving your children small tasks in exchange for an honorarium. Promote entrepreneurship or just a basic understanding of business by explaining the motives behind marketing campaigns and value systems.
You can also consider enlisting help from an interactive medium. There are plenty of fintech start-ups working in financial literacy for school kids.
What’s in it for you?
Besides being a good parent, making your kids financially literate is also about shoring up your own knowledge. This is parenthood's way of offering an opportunity to better your financial discipline and become a role model for your kids. Be a part of your child’s financial journey and come out a better person yourself.
You must make sure to keep the process fun and engaging. Finance can quickly become boring for a kid that’s yet to enter the world. But with your help, children can do much more than just learn about finance. They can maneuver it to their needs, and bend it to their plans. And who knows? Maybe your child will become a top investment advisor as well.
Disclaimer
This blog is meant for educating people about the importance of the right financial planning. The opinions expressed in the Blog are for general informational purposes only and are not intended to provide specific advice or recommendations for any individual or on any specific security or investment product. It is only intended to provide education about the financial industry. Consult your financial advisor to get personalized recommendations based on your life circumstances.
