‘My sons are 7 & 8 years old. We are having some financial issues due to some losses in our business. We have been cutting down on daily expenses, my sons are finding it quite strange. I am in a great dilemma as I am unable to explain our situation to them. What should I do?’
In general, kids have little to no concept of money. They know that if they want something at a store, mom or dad just need to reach into their wallets and purses for that never-ending supply of green paper. The problem is, in a majority of schools, financial literacy is not a core topic. It’s our responsibility as parents to teach our kids the value of money.
Here are some tips on how parents can discuss the importance of money with their children
- Explain how money works– Your child needs to know there’s not a little printing press inside every ATM. Explain that the bank is like a big piggy bank where you keep your money until you’re ready to use it. Tell them that when you spend what’s in your account, it’s gone until you get paid by your boss and can put more in.
- Build your child’s money skills– Reinforce lessons he/she is learning at school by making a chart that illustrates basic money equivalents. Post it on the refrigerator or in your child’s room. Help him/her practice exchanging pennies for nickels and dimes and quarters for rupees.
- Give your child a piggy bank– A great way to start your child’s financial education is to give them a piggy bank, allowing them to start saving for themselves.
- Teach children basic maths early– Even before they start nursery or school, you can give your children a boost by showing them basic maths. By teaching your children some simple maths skills, such as addition and subtraction, you can give them an understanding of the subject before they start school.
- Give them a helping hand towards independence– As your children enter adulthood, they will start to think about leaving the family home. Whether that is in rented accommodation, university or buying for themselves, make them consider the costs of living alone.
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