How to Talk About Financial Education with Children?

How to Talk About Financial Education with Children
How to Talk About Financial Education with Children

How to talk about financial education with children? Sometimes talking about money with the little ones and small ones can be tricky. However, the sooner children contact the universe of finance, the easier it is to deal with this issue in the future.

Therefore, it is recommended that parents start this conversation very early, in early childhood. With that in mind, we’ve gathered 8 tips for talking about financial education with children. Check out!

8 tips for talking about financial education with children

3 – Start by explaining how money is used

Explaining to children that many things cost money is the first step in financial education. A tip is to present, little by little, the value of things straightforwardly and quickly. For example, at the grocery store, show the kids a $10 bill. So, teach that it is possible to buy some items, such as milk, butter, and bread.

It’s also important to emphasize what you can’t buy for that amount. The idea is that a child gradually understands that the things we consume and buy come at a cost. So it is possible to introduce concepts such as “expensive” and “cheap,” for example.

2 – Teach where the money comes from

For young children, the source of money can be pretty romantic. For example, it is pretty standard for little ones to believe that credit cards are an infinite source of money. However, parents must explain that they earn money through work and buy things around the house.

It is worth mentioning that this same money is then kept in a bank. Therefore, the card is nothing more than a tool to get money from the bank. In this way, it is possible to explain why we cannot spend more than we earn. It also teaches about the value of work and our responsibilities.

3 – Show that using money requires choices

One of the critical points for children to understand more about financial education is that compromises are needed. That is, a certain amount of money allows only a specific purchase. So, if your little one wants to buy candy, they will have to choose between ice cream and candy bar, for example.

Now, if they want a toy, put together a certain amount of money. And, at that moment, the concept of “savings” also enters. So, gradually, present the options for the children to make their own choices. Also, teach yourself to make plans to buy the things you want.

4 – Piggybank helps!

Financial education help kids save coins and save money, a great idea is to use a pot or piggy bank. Even better if this object is transparent, as it helps the little ones see the accumulated money. Then encourage your little one to set goals for that amount of money. Thus, the child can save money to buy a toy or take a walk, for example.

So when the goal is to reach, celebrate the effort. Joining is not easy, especially for young children, who are still developing their sense of time. Nevertheless, it is worth mentioning all actions!

5 – What about allowances?

Allowances can be a good opportunity for older children to learn to save money and spend it responsibly. First, however, it is essential to set an age-appropriate value. For example, some professionals recommend only six or seven when the little one already has a good grasp of numbers and starts as mathematical operations.

However, younger children may have some income, coming from gifts from family members or a little money throughout the week, for example. So again, the idea is to set a value according to age—for example, $2.00 every fortnight for two-year-olds, $3.00 for three-year-olds, and so on.

6 – Teach your kids to donate

Along with financial responsibility comes social responsibility. For example, teaching your son or daughter to donate a certain amount of money is very important for children to develop social awareness, empathy and for them also to learn to share.

In addition, the donation can take place through money or not. After all, one possibility is to donate toys, clothes, and books, for example. Anyway, every donation also helps financial education as a whole.

7 – Comply with the agreed

So it can be challenging to watch your child cry because they want a present or candy. However, compliance with the agreed content is essential. For example, please follow the agreement if you decide to use the money for desserts and your child spends a lot of money on toys.

Gently and firmly explain that money requires choices. And that, in this case, he can’t buy dessert either because he’s already spent the money on something else. It may sound harsh, but your child must stick to the plan. And more: understand that especially the money is not infinite.

8 – Include children in any financial decisions

We know that it is possible to include and motivate children in the daily life of the home, through the division of domestic tasks.

For example: How about doing the same in the family’s financial decisions? Include children in trips to the market, ask them for their opinion when choosing a tour or even a subscription to a product. The important thing is to include the small and slight in decisions, explaining how the family budget works.

Also, sharing responsibilities is a way for children to feel an active part of the family. And don’t forget to make room for questions! Question what the tiny belief should be included or even excluded from spending. In this way, you encourage the active participation of children and encourage critical thinking.

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