Children’s Financial Education: What Is It and Why Is It Important?
When we look for any extracurricular activity for our children, we are presented with the benefits of investing in the cognitive part from the time of childhood. That happens because it is proven that children have a greater ability to retain content and learning in the early years.
Who has never been amazed at how quickly a child learned a second language or a mathematical concept, right? This is the result of playful teaching given to them while they are in the phase of discovery and questioning.
There is much talk about sports activities and language learning as stimulants for mental and motor development. However, little is discussed about the importance of investing in children’s financial education.
For this reason, we have prepared comprehensive content for you to understand what finance is, its importance and ways to teach about it.
What is Children’s Financial Education?
Typically, concerns about debt, investing, and saving money only arise when your relationship with money has already become a problem. There are ways to prevent this from happening to your son or daughter.
Basically, children’s financial education is teaching about consumption, goals, dreams and investments, with the aim of creating a healthy relationship between children and money.
Although the concept may seem complex to a child’s mind, it is worth remembering that childhood is the perfect time to awaken diverse interests, introducing knowledge that will have positive results in the future.
What is the Best Time in Childhood to Learn About Finances?
The best phase of childhood to learn about finances is the second, also known as the “Why” period, when our little ones are between 3 and 6 years old.
Children are introduced to and placed in a world of experiences, where everything is new. Therefore, they tend to ask a lot of questions about absolutely everything, which is a determining factor for the construction of knowledge in the long term.
What is the Objective of Children’s Financial Education?
The main objective of teaching about finance is to teach children the value of money, aiming to guarantee a secure financial future for them.
This knowledge can be presented from the moment they begin to learn about numbers, through games related to scenarios that will be part of their daily lives as adults.
How Important is Financial Education for Children?
By introducing learning through children’s financial education, our children will be able to manage and use their resources consciously in their dreams and goals.
Furthermore, they develop a greater sense of responsibility, recognize the value of saving and learn in practice the concept behind the saying “money doesn’t fall from trees”.
How Do I Teach Financial Education to My Son or Daughter?
Knowing all the benefits of this teaching, we have brought some ways that you can introduce this subject into your children’s lives.
1. Talk to Them About Money
It may be obvious, but many parents or guardians avoid talking about money with their children. The more transparent you are about your savings, the better they will understand it.
Our children see us as examples, so all the information we pass on to them will be stored in their memories.
2. Teach the Difference Between Need and Want
A common problem among people who tend to consume a lot is differentiating between what is a need and what is a desire.
It is important that they are aware and know how to identify what is necessary. To make this possible, present them with flashcards containing categories such as: food, clothes, items they do not have, books, school supplies, electronic devices, decoration, services.
Take one of these cards, for example, the food card, and ask questions like: “What foods do you eat daily?”, “What food is important to keep you healthy?”, “Are sweets and snacks necessary to keep you strong?”, “How much do you think these products cost?”.
The goal is to access their world knowledge and work on what is important for their routine and what is superfluous. Furthermore, make it clear that in some situations superfluous things can be acquired, but it should not be an impulsive action.
3. The Concept of Reward
Many may consider this technique to be traditional, but that doesn’t negate its effectiveness. Rewards are a great way to develop a sense of responsibility and appreciate the money that comes from daily tasks.
How to introduce this concept? Divide the household chores among family members and, for each task completed, set a value and reward them. This way, they can use the money they receive to save or buy an item they really want.
4. Take Your Little One to The Market
Who remembers when fake money or coins were considered the best toy? Well, you will go back in time and have fun with your son or daughter.
Buy or make bills with them, giving them a specific amount to spend. Take them to the market and tell them that they will be responsible for the day’s shopping, but the total price cannot exceed the amount they have on hand.
This practice will allow them to exercise their minds, as the little ones will be doing addition and subtraction calculations.
5. Keep Your Money in a Piggy Bank
We live in a context where there are several aspects of consumerism. Because of this, the habit of saving money is a concept that has lost strength.
Remember the reward? Teach your children to save part of that amount and set goals for this action, which could involve buying school supplies, a piece of clothing or an outing.
You can also establish the idea of interest, that is, the more they save, the more they earn an extra 1 or 2 rs at a time.
6. Develop a Sense of Empathy
In addition to financial responsibility, children’s financial education can also help develop a sense of empathy.
Look for institutions that promote charitable actions, choose one with your daughter or son and make donations. It won’t always involve money, it could be clothing or toy drives, but it is essential for our little ones to cultivate empathy for others.
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