Articles
Tell Your Children What to Do With Their Money
by Luisa B. Brand DeveloperTeaching your children anything about financial literacy can be a tough task. Given the fact that today’s youth has internet and social circles at their disposal, getting false or misleading information about how finance actually works is only a matter of time.
Thinking a step further and teaching a child what money represents and how to use it properly can be easy if you create a multi-step plan that involves creating their personal savings and teaching them with examples. So how can you actually tell your children what to do with the money they have available and learn valuable life lessons in the process?
The cause of the issue
The problem with today’s parents is that most of them start thinking about financial literacy very late in the game. Many children don’t even think about money until they are over 10 years old, and even then, they have all the change in their pockets they will ever need.
This is a huge problem that takes years to amend if you don’t pay careful attention to teaching your child some moral lessons about the power and corrupting influences of money and greed. According to a study conducted by PISA, the top financial literacy of children ranked by country is as follows:
1. China
2. Belgium (Flemish-speaking students)
3. Canadian provinces
4. Russia
5. Netherlands
6. Australia
7. U.S.A.
8. Poland
9. Italy
10. Spain
11. Lithuania
12. Slovak Republic
13. Chile
14. Peru
15. Brazil
Start sooner rather than later
While your child doesn’t have a notion of what money, credit, allowance or even salary represents, they can certainly make a difference between existent and non-existent items. For example, explaining finance to your child by using toys, crayons or even snacks as an example of a currency can be a good way for them to remember some crucial things.
You can’t have a snack if you don’t work for it, and you can’t buy it if you don’t have a job. You certainly can’t buy your mom a present for her birthday if you haven’t saved up enough money for it, or over calculated your expenses, and so forth. Teaching a young child to use money not as a goal, but as a means to an end is the perfect way to set them on the right track early on, making your financial literacy teaching much easier.
Learning from mistakes
According to the recent study, more than 20% of US students fail to meet the baseline requirements for financial literacy, based on a standardized test conducted globally. This means that every fifth child can’t make sense of bank allowance, insurance policies, loans, or even simple monthly bills. This is a huge problem that many parents try to ignore until it becomes too late to do something about it.
No one was born perfect, and not even the parents of those US children knew anything about finance until someone else taught them trough their own mistakes. A good way to introduce your child to everyday finance management is by talking about the most common financial terms and how you coped with them in the past.
This will help your child not only learn from your experience but pay extra attention not to repeat those same mistakes. It’s also a good idea to offer your children a chance to do something financially responsible or even take them with you when you go to the bank. First-hand experiences are the best way to learn anything, especially when it concerns such an important but abstract topic.
Waiting before buying
Changes take time to settle, and it couldn’t be truer than in this situation. Financial literacy and responsibility takes years to develop and sometimes it takes only several days for all that effort to go to waste. This is why holding out on your child might be the best solution in some cases.
For example, if your child is asking for a raise in allowance in order to have more money for school excursions or best college writing websites, try negotiating with them. Tell them about your monthly family income and what it would mean for your household as a whole.
Giving into your child’s desires for more money is a sure way of letting them know that their allowance is practically unlimited, since they will always get what they want. Try making them think about the choices they make with their money by giving them less than they actually need and teaching them that sometimes life simply won’t give them enough resources for everything that their hearts desire.
Prepare the punch line
Every financial literacy lesson you teach your child should serve a greater purpose. Don’t lead your child on without giving them a proper lesson or a closure to your monologue. Make every speech or discussion count and don’t scold them for making financial mistakes.
Instead, talk about it as a family and try making them understand what it means to overspend or borrow money from a friend. Tomorrow, that money may come from a bank and have a huge interest rate from which you will be unable to save your child. Be your child’s moral compass instead of the jury who judges every decision they make simply for the sake of it.
Conclusion
Inspiring your children to start saving as soon as possible is a great way to start working on their responsibility and financial literacy. While you can’t control their every move, it’s good to provide help and be a mentor figure in their first financial steps. Every step your child takes will take it closer to realizing what money actually means in today’s global economy where everything costs something and nothing comes free.
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About Luisa B. 
Brand Developer
4 connections, 0 recommendations, 17 honor points.Joined APSense since, March 7th, 2016, From Chicago, United States.
Created on Sep 13th 2017 03:13. Viewed 874 times.
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