I believe that financial literacy should start at a young age.
Because I’m sure when you were a young adult and started working for the first time, the financial responsibility that falls on you may be quite shocking.
“How do I decide what to do first?”
“How much should I save?”
“Should I invest?”
And then you realise, you can’t make sound money management decisions.
In Fact, in Singapore, you will hear many cases about young adults in their 20s not knowing how to manage their money, and still have their parents paying for their bills!
That’s why it is best to learn how to start teaching them at a young age,
And this is how you can start.
Building A Foundation
Firstly, it is important to give an identity to money.
That sentence may sound funny, but people identify with things easier if something had an identity.
Like the way as kids, we identify with our favourite cartoon characters,
And can almost recognise it as a sentient being.
As soon as your kids start getting to know about money,
Ask them the following questions:
“Where do you think money come from?”
“What do you think money is?”
“What do you think we use it for?”
These are ways you can use to stir up your child’s interest,
And start explaining to them where money come from.
Generally, the first few things you learn as a child is how to communicate,
And then you proceed to the school’s curriculum of in-depth language,
Math, Sciences, etc.
But not about money.
And you may neglect this important piece of education because
You think that it’s too difficult for kids.
But think about it…
If you don’t start now, will it get easier as they go through the rebellious stage
Where you think they are more ready?
I’m sure my rebellious phase of life didn’t help me learn much things for that matter.
That’s why I feel you should start educating children while they are most receptive to learning.
Fostering The Savings Habit.
Once you have them familiarised with what money is,
You can prep your child for allowances
by giving them different denominations of money,
And letting them put the money inside a box or piggy bank.
Although this may not teach them anything about money management,
But it will get them accustomed to storing money, and let them watch it grow
So they can see for themselves how money accumulates.
This will motivate them to save more as they watch their money grow.
A good habit is nurtured step by step,
And this practice can get them to create the habit of storing money,
As well as learning the different denominations of money.
Spreading Their Savings Out.
Now that they have gotten they hang of moving their hands towards the piggy bank…
And once they start receiving allowances, it is time to teach them how to divide their finances.
And example of categories would be:
1) Money to be spent
2) Money to be saved
You can also go further to include money for investments & donations as you see fit.
Break the School System!
Normally, you only start learning the importance of good money management by the time you start working. That’s way after your education ends. The obvious reason why is because…
They don’t teach you this in the Primary or Secondary school system,
And there’s no nurturing of money habits in the curriculum.
Therefore, it is up to you, as a parent to nurture your children so they don’t make the same mistakes
That the young and reckless adults do.