How To Teach Your Kids To Be Financially Literate
Money habits can already be formed at an early age. Here are four key concepts that can help your children develop financial literacy
As shown by research, money habits can already be formed in one’s early years. That’s why, at a young age, it’s important to teach children how to be financially literate so they can better manage their finances in the future. “If you want to plump the seeds of good behavior, you’re much better at starting at 7 to 12 and they will carry on those values for the rest of their lives,” says Marc Fancy of Prudence Foundation, the community investment arm of Prudential Corporation Asia. “Access to spending money is so much easier with the technological improvements across the world. In that context, with children more technologically adept and having more access to buying things, you really have to educate them early.”
While it may be difficult for parents to teach financial literacy at home due to a lack of significant learning tools especially during the coronavirus (COVID-19) pandemic, there are other platforms that can expand children’s knowledge of money online. One of which is Cha-Ching, an award-winning financial literacy program started in 2009 by Prudence Foundation via a special tie-up with Cartoon Network Asia and Children’s Educational Specialist Dr. Alice Wilder. Featuring parent guides and daily challenges in the form of interactive shows, comic books, and games, the curriculum teaches kids how to properly apply four key money concepts to their everyday lives.
Earn. Children need to understand that they can’t get everything that they want for free. “They should know that if they would like to buy something, they need money to buy it. They should recognize that if they want to earn money, they’re going to have to work hard for it,” it says on their website.
Save. The idea of saving money for something they would like to buy has to be instilled in them early on. This includes depositing money to the bank or simply keeping their savings in a piggy bank. “By making considered choices about what to do with their money, they will acknowledge that the less they spend, the more they save.”
Spend. An essential part of spending money is being able to know the difference between needs and wants. According to Cha-Ching's website, “They should be reminded that almost everything costs money and that sometimes, they have to wait to get what they want.”
Donate. Lastly, paying it forward is a great way to express gratitude for everything they have. “Your child can consider that helping people in need will make this world a better place.” It’s not only through money that it can be done, but also random acts of kindness, which can certainly improve the lives of others and inspire change.
Photo from Cha-Ching