Make use of these activities to develop financial literacy among children:
Demonstrate the significance of saving
Demonstrate the value of saving to children by having them save a portion of their allowance each month to purchase something they desire. Teach them the value of frugality and the dangers of impulsive spending, as well as the fact that any kind of debt is a bad idea. This will assist them in comprehending the implications of utilising credit cards and easy money.
Make them earn their allowance
One of the most important lessons you can teach your children, regardless of their age, is that money is a limited resource. When they have to work for their money, as you most likely do, they will learn to be more careful with it.
Many parents provide their children with a weekly allowance, which can help teach them budgeting skills. Making them earn money by doing chores would be even better. Making the mental link between income and personal effort will pay huge dividends when they grow up and fly the coop.
Encourage your child to work part-time
Encourage your children to work part-time so that they will value not only their money but also the time it takes to earn it. If they are too young to legally begin working, provide a monetary incentive for chores such as washing the car or vacuuming the house.
Teach them how to keep track of their expenditure
Emphasising the importance of keeping track of one’s spending, having children keep a weekly account of where they spend their money, and tabulating it at the end of the month will undoubtedly be an eye-opening experience for them. Knowing where your money is going is an important part of becoming a better saver. Encourage children to consider how they spend their money and how much faster they could reach their savings goal if they changed their spending habits.
Make it a game
Who said financial education had to be dull? Even board games can teach children the value of being frugal. Payday is one of the best games for teaching kids important money management skills. With the next paycheck coming in a month, players must make their money last. They can buy items they believe will make them money and even take out loans, but getting in over one’s head can cause problems, especially if there are other bills to pay. Does this sound familiar?
Even Monopoly can teach important lessons, with players deciding which properties or buying strategies will yield the highest payoffs and weighing risk versus reward with each move.
Discuss money directly
Financial crises teach us about money management and how to spend it wisely. Teenagers must be financially literate in order to use their hard-earned money wisely and to be aware of money matters. Money is central to our daily lives; we spend it not only on education but also on what we eat, the clothes we wear, the technology we use, and much more. Even if you don’t bring up money in front of your teenagers, they watch you anyway.
Contribution – Cambridge International School & Cambridge Early Years Centre