How to Go about Your Children’s Financial Education

They say that kids’ brains are like sponges. You can see the truth behind this because our kids are naturally curious. During breakfast, they might ask why the cooked yoke on their sunny-side-up is pink while yours is yellow. Or perhaps, they will ask you why dogs do not talk.

Their curiosity makes it an excellent idea to teach them about money. Their financial education does not have to be complicated. As a parent, you can determine the type of lessons they can handle. However, if your little one does not seem interested in the topic, you can throw the following questions to pique their curiosity. 

What Is the Value of a Coin or a Bill?

Your children might wonder why the man at the grocery store or the woman at the restaurant gave them the money in exchange for their items. To help them understand the value of money, you should show them the coins and bills and tell them what each can buy. You can also show them the items that do not have monetary value, such as the plastic toys in the toy shop.

You can continue their financial education by introducing them to the person in the coin or bill. You can incorporate this lesson with history if they are a bit older. For instance, if you are in the supermarket and spot a picture of President Abraham Lincoln on the five-dollar bill, you can tell them that he was a leader during the Civil War.

What Do We Use Money for?

After teaching your child this lesson, they might ask what they can do with the money they receive. It can be the best time to discuss the importance of saving and spending. You can help them decide what they should buy for themselves, such as a toy or an ice cream, and what they should keep for a more significant purchase, such as a bicycle or computer.

Their financial education should not end there. A younger kid might not understand the concept of interest. In that case, you should introduce the idea of interest later. It will be better if they know the basic principles of finance. As they grow older and become more familiar with money, you can introduce them to the idea of interest.

At this point, you can purchase a special notebook and ask them to record their income and expenses. This way, they can be more aware of their rising expenses.

What Is a Budget?

Since it can be a complex topic to discuss, you can start with the basics. You can tell your children that a budget is a list of your income and expenses. Another trick is also to show them how to categorize their income and expenses.  

For instance, your income can be divided into your salary and your side business. In contrast, your expenses can be divided into basic costs, such as groceries and electricity bills, and your weekly expenses, such as the rent and transportation fees.

Conclusion

These are just some ways to introduce your child to the financial topic. In the long run, they will benefit from your efforts. Even if they do not grasp the concept of finance, they will still have the skills to prepare themselves for the future. 

If you want more tips on how to go about your kid’s financial education, you can tap into Kiddie Kredit. You can utilize our numerous apps to help facilitate the learning. All you have to do is to download them, so do it now!