Teaching children real life finance lessons is important. It will help them to get an insight into how they can become financially secure. Let us take a look at some ways to teach real life finance lessons to children.
Finance lessons are something ignored by schools as well as parents alike. While math is taught as part of the syllabus, practical finance lessons are obviously absent. It is the finance lessons, and not always algebra that will actually help a child in later life.
Most people when they are in their 20s are pretty clueless about banking and saving. Very few know how to even open an account in a bank or do their taxes. It is essential that lessons like these should be taught to kids at an early age.
As schools do not make it a priority, the responsibility of educating the children falls on the parents. Parents should simplify concepts of money and teach their children about it. Here are some of the financial lessons every parent should teach their kids.
Kids must be made aware of the fact that they will have to work in order to get money and run the household. Kids have no idea about where money comes from. Teaching your kid about jobs will also make them realize the importance of money. They will not demand for things if they know that money does not come automatically. You can train them further about jobs by asking them to do chores around the house and paying them for it.
Really important that kids should know about banking. Whenever your kid receives some money as a gift, talk to them about saving and its benefits. Buy them a piggy bank where they can save their money. When they grow up teach them how to manage their accounts, write a cheque, open an account, handle their pass books, etc. They should not be absolutely clueless about the banking system when they grow up and start earning. You can even take them on a trip to an actual bank.
Shopping and Calculating
While kids do know about shopping, thanks to the frequent visits to the mall, they are clueless about buying decisions. Shopping is not only about picking items and billing them, but also about making decisions. Teach them how to look at price tags, look out for discounts, and make decisions based on what to and what not to buy. A good idea would be to hand your kid some money and ask them to choose with that money whatever she wants. That will help them learn about decision making based on the money in hand. It will also teach them about needs and wants.
Another area where young adults are clueless about. They must require loans for a house, a car, or even for education, but they are unable to understand the concepts properly. Try to simplify the concept and teach your child how they might need a loan and how to go about it. It has been seen that little games help a lot in educating young minds. Next time they ask for something that is beyond their allowance, lend them a loan, on the condition that they pay you back.
Next time they get some money, you must ask them to give it to you and tell them that it is on account of the loan they had taken. Teach them when not to take loans and about good interest rates. Teach them about the ways to get good deals for taking loans where they do not have to pay huge amount of interest.
Talk to your kid about interest and how it can double up their money. Savings, as we mentioned, should be taught at a very young stage. Tell them that the more money they save, the bank will reward them with more money in the form of interest. It really gives them an impetus to save money. You can also device a game on that.
Having adults who can make financially accurate choices can play an important role in boosting a country’s progress. The education you are providing today will be appreciated by your kids later in life.
What is the importance of teaching real life finance lessons to children? How to teach finance lessons to children? What are the ways to teach children to save money? Discuss here.
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