MONEY 101 for KIDS
Financial knowledge and readiness is one of those life skills that, the sooner you start, the more prepared you are as you enter adulthood.
Children as young as three can start learning about the value of money, the importance of saving and how to distinguish wants from needs. When they start to get those perceptions at an early age, it’s easier as they grow up to make those wise financial decisions.
Parents shouldn’t be a financial literacy expert because we all have make money mistakes at some point in our lives.
All of your money choices, either good or bad, can be turned into positive learning experiences for kids.
The most important thing you can do is to prepare your child for their financial future by having honest, solicitous and regular conversations about money.
Here are some useful money lessons from Cla and Sha:
1. Use their allowance to teach them budgeting..weekly or monthly.
According to Cla, “In grade school, my parents gave us our allowance on a weekly, instead of daily, basis. I did not only learn how to budget, but also to have discipline towards spending beyond my allowance.
As a result, I never uttered the words “wala na akong pera!” (“I have no more money!”) which had become such a common phrase among some of my friends that they might as well have tattooed it on their foreheads.”
2. Instill the value of money even in their earlier years.
Cla became aware on the concept of money at an early age, she detailed that during summer vacations in grade school, she and her sister made bookmarks out of cartolina and permanent markers, “laminated” by makeshift, ironed plastic wrap. On especially restless days, they also offered to do the chores in exchange for P5/day.
The best way to encourage sound spending habits is to show them. When planning a trip to the grocery or discount store, get your children involved in making a considerate list and sticking to it. This will teach them to avoid the nuisance of all savers: impulse buying.
3. In line with financial terms, show them financial computations like compounded interests from credit cards or investment returns.
Just like you, your child should learn as much as they possibly can, and it’s never too early to start. Even basic lessons have a long-term impact. Your three year old may not be old enough to count peso bills, but they’re definitely old enough to practice being patient and making choices.
4. Money is always a choice. Kids can be empowered by letting them make decisions.
“By presenting them with options, we are giving them the freedom of decision by showing them that there is a consequence in every decision.” Include your child in some of your small decisions. For example, at the grocery store, explain why you pick one item over another.
5. Unleash their creativity.
Cla shared that she got into a choir that, aside from having toured her around the world, earned her some additional dough from singing for weddings, corporate shows, and the like. This reinforced something that everyone must know deep within.
“We can make something we can make something out of nothing. My knowledge, my talents, and other acquired skills, when put to good use, become money.” – know more check our book “Money Grows on Trees
6. Just like GOOD study habits, develop GOOD money habits.
Kids can start regular visits to the bank, setting aside some savings, earning extra during summer, open their mutual fund account instead of just a bank account.
7. Teach Your Child Proper Mindset when buying something expensive
“If your child wants an expensive toy or gadget, plan w/ them on how to acquire it instead of saying – you don’t need it or it’s too expensive”, Sha expressed that parents can inculcate to their child the belief that something expensive can be affordable with proper planning or goal setting.
8. Boost your child’s confidence and expose him/her to as much social gatherings as possible
Sha’s mom encouraged her to participate in all school activities which gradually built her confidence. no amount of financial literacy will get her to all achieved business achievements without knowing her self-worth.
9. Encourage your child to explore the business side of his/her passion.
Encourage to find a hobby and activity in their life that fills them with excitement, joy, and self-worth, If you see your child to be good in writing, suggest them to make a blog of if your child is passionate in painting, recommend them to sell their artwork.
10. Give your child some task or involvement in your business or work
Sha, at an early age, already knew how to handle financial responsibility. She said “at the age of 10, my mom had started to involve me in our business by asking me to list check receivables to assist her in her accounting. And, It always gave me such excitement because I just loved the feeling of holding checks!
When I accomplished that, not only did the succeeding tasks appear easier, but it had also given me the sense of achievement, and it was incomparable. “