January 28th, 2009
Financial Literacy For Children
As parents take a look at the current economic crisis, many are wondering about what kind of future their children will be facing. While there are no financial guarantees in this world, parents can give their children a boost in the right direction by providing them with sound financial guidance and education now, while they are still young. There are several programs being promoted right now to increase financial literacy in children, and parents can put several techniques to use to start teaching their children the value of a dollar right now.
1. Start when they are young, but not too young.
Very young children are probably not ready to handle the basic concepts of financial management, so it is best to wait until they are old enough to start receiving an allowance. By the time a child is around seven to eight years old, they should be able to start on the basics of proper money management and understanding how the system works.
2. Start small but lay the groundwork well.
Once a child is old enough, you can start teaching them some basic skills with their allowance. Help them to understand that performing work earns them money. If they don’t do it well, or if they don’t do it all, then they don’t get any money for that week. It is best to set up an allowance system that is actually based on real chores, rather than just given to the child. Otherwise, you are missing out on an opportunity to teach your child about the value of hard work.
3. Treat their allowance like a paycheck.
Expanding on the point above, if you treat your child’s allowance like a paycheck, this will give them a good foundation that will carry them throughout the rest of their lives. Set up a system where they will be paid a certain amount of money for doing certain tasks. Help them to understand that if they don’t get the job done, they won’t get their allowance. This simple message will get across loud and clear.
4. Teach them to spend and how to save.
Now that your child has an allowance, it’s time to teach how to spend it and how to put some aside. Try to work on getting them to put half of their money aside each week. For the other half, take them to a dollar store and have them pick out whatever they want. Then, put back the things that they cannot afford. This will teach them the value of a dollar and just how far it will and won’t go. If they want something they cannot afford, focus on teaching them about putting aside money until they can afford it.
5. Keep reinforcing these lessons.
Until the child reaches their teenage years, you can keep reinforcing these lesson. Once they get to around thirteen or fourteen, you can start to introduce more complicated lessons. For now however, getting the basics down about earning, spending and saving, will provide them with the knowledge they need to get started on a prosperous future.
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Some very useful pointers on a topic I have been thinking about for a while now!
We teach our kids to separate their money into 4 accounts:
Spending
Short Term Savings
Long Term Savings
Donations
This teaches them how to plan for immediate, short and long term goals, and that we need to help others, no matter how little.
Well this is some really good common sense. If you learn the value of money from day one you stand a better chance in adulthood.
I also agree with the previous comment, some good advice there too.
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Many parents neglect an important lesson that can be taught to children right in the home – how to be successful with money.
Even if you have made financial mistakes in the past, with a little creativity and common sense you can share some important principles with your child.
Mrs. Cherryl Hanson-Simpson has written various articles on financial Literacy for Children your readers can check them out here. http://blog.financiallysmartonline.com/?cat=36
Due to present economic downturn, making your child financially literate is imperative. Check out some different bodies who can educate children, children learn the basics of money management at home, after that school teachers can educate their children by financial literacy resources, non-profit organizations have taken the initiative to educate children about money management, there are many banks offer financial education either independently or in collaboration with schools. So, i conclude that financial literacy is become very important for their bright future. For more details refer http://www.prime-targeting.com/financial-literacy-a-must-for-every-child-today/