Children acquire various skills and habits from a young age, you are familiar with the notion that children absorb knowledge and abilities like a sponge. What is crucial is that parents introduce them from a young age to various skills and positive habits that will be of great importance to them when they grow up. One of the most important secondary things in the world is money, and it is very important that children understand the way money and finances work and that they handle it in the best possible way.
Today, there are various options that, along with accompanying mobile applications, offer various opportunities for training, learning, and understanding all spheres of finance, namely debit cards for kids. In addition to learning financial literacy, this option helps a lot by teaching children to assume and fulfill responsibilities within a given deadline.
There are certain steps you must take if you want to raise and educate your child in terms of financial literacy. We will highlight the best ways and methods that you can apply within your family.
1. Introduction to Money
At the very beginning, the most important thing is to explain to them the origin and way of making money. That money is earned by hard work and they must be careful when it comes to money disposal. One of the most important things is to explain to them the difference between needs and wants.
2. Explain the Value of Money
You must explain to them that money has value as a currency and it is used for buying necessary items such as food, clothing, and other things. Also, you should try to introduce them to different types of coins and bills. It is important that they understand the concept of saving money.
3. Teach Them How to Spend Responsibly
It is essential for children to learn how to save money and plan ahead for their purchases in order to prevent them from overspending. You can teach your child about budgeting by setting up an allowance system or having them earn money through extra chores around the house.
There are more important things that parents have to spend money on, such as paying bills, rent, groceries, mortgages, cars, gas, and many other monthly expenses. And when all the fees are paid, they have little money left to fulfill their wishes, so they have to keep that in mind.
4. Giving a monthly/weekly allowance
Parents decide how much allowance they will give them following their income and possibilities, as well as the age of the child. Some parents give a weekly and some a monthly allowance. We advise you to still give them a monthly allowance, that way they will better learn to distribute it during the month.
Children can use their pocket money to pay for their phones, and games and use the money for their own needs. You must reward the children if they distribute the money well from month to month. And it is very important that part of the money they receive leave at least a certain percentage for savings.
5. Taking over household chores
It is very important that children master the skill of responsibility within the household community and that they fulfill all the duties that have been assigned. It doesn’t matter how old the children are, they can help by starting with smaller tasks and gradually moving on to less complex household chores. Since they are part of the collective, they must contribute. Many parents give their children extra money if they complete all tasks and obligations on time within the given time limit. Also, if they refuse to fulfill certain obligations, you can reduce their pocket money for the next month.
6. Set goals and a savings plan
One of the most important things is to teach them to save money, and not to react impulsively and buy something they want right away, sometimes it’s better to wait. Children must set their own goals for which they save money because that way they will stay motivated. Some children save for a car, a trip through Europe, college, or a course, their goal must encourage them to persist in saving.
7. Let them make their own money
The children should find a part-time job that they will do in their free time and will have additional income in addition to pocket money. Sometimes the money their parents give to them is not enough for their needs, especially if it’s teenagers. There are various jobs that they can do, from babysitting, dog walking, looking after neighbors’ pets, mowing grass, taking care of plants, shoveling snow, selling lemonade, giving instructions in some subjects, working in a store, working as a waiter, and many others.
8. Provide them with a card for children
One of the most well-known and effective methods of teaching financial literacy is by having a child’s credit card. The options within this offer are various, from the possibility of creating a savings plan, earning, investing in various shares, donating to the needy, and spending money. Within the application, there are personalized tables of duties adaptable to each age of the child. Having a card, children have everything in one place, and insight into every aspect of their finances at any time. Parents have control over the activity that their children perform on the account and full insight into everything.
Overall, these are some of the ways parents can teach children financial literacy. By educating them and showing them how to save money and make smart decisions, you’re helping to set up a strong foundation for their future. Parents should also be mindful that finances is an ongoing education process that needs constant monitoring and adjustment as their child grows up. Teaching children financial literacy will help them become successful adults in the future!