With economic meltdown in America, the country seemed to have learned many lessons and one of them was learning to save for the future. It is important for every individual from every country to exhibit smart economical behavior. It helps you to have a better future without having to worry about the days after the retirement. To enjoy the second innings of life, you need to smartly invest in the first innings. And what can be better than learning about financial issues from childhood itself?
Importance of Financial Literacy for Kids
All parents want to give a good life to their children but it does not mean that they should never understand the value of money. It is perfectly alright to fulfill their wishes but, at the same time, let them know that money does not grow on money plant, it needs to be earned. Some parents also think that they never learned about financial planning yet are leading a good life then why should their children be burdened. Well, it is important to understand the difference between the economic condition of your era and what your children are living in currently. Today, the job market and the economy is so unstable that your children must learn to use money wisely otherwise the bankruptcy cases will just keep increasing.
Children should also learn to differentiate between the needs and the wants, which is quite a challenging task in today's world of advertising gimmicks and increasing consumerism. Almost every product or service targets the kids as their potential promising buyer. And most of the time our children fall prey to the marketing strategies and hence it is important for the kids to understand the value of money so that they can take the right decisions for themselves. One of the important reasons why you should give a serious thought to financial literacy for kids is that it is not taught in school. Though many schools have included financial education for kids in their curriculum, there are many schools which still haven't understood its importance. In such a scenario, it is the responsibility of the parents to treat the world as the economic classroom and make kids financially literate.
Teaching Kids Financial Literacy
Financial literacy for kids starts from home. There are many ways you can make kids realize the worth of money. Simple things like maintaining an expense diary can teach children how much they spend. All you have to do is tell them to enter the transactions of their pocket money in the expense diary. It will also help them keep a record of their daily financial transactions. They will come to know about the unnecessary areas where they are splurging money. Another thing you could do is gift you kid a good old piggy bank. No doubt, it will teach him to save money. Allow your kids to use the piggy bank money to buy their favorite toys. This way they would get the feeling of buying something of their own hard-earned money. After all, a penny saved is a penny earned!
You can let your children participate in the budgeting of the house so that they know that, from the early morning milk they drink to the night suit they wear before going to bed is being 'paid' for. But remember that teaching the basics of finances to kids need not be preachy and boring. You can use various games and fun activities to get them interested in learning about money. You can visit various websites that have some great entertaining games. This participatory approach would result in better understanding.
Financial literacy for kids would certainly help your children have a better future. They will understand that money is not everything but it definitely helps you enjoy that 'everything' better.
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