Teaching children to develop an awareness and healthy perceptive of money is an important part of parenting. It makes them to understand money, value spending and develop gratitude. It resists entitlement tendencies, greed and selfishness. It lays the foundation of careful and responsible money management in the future. It is very important therefore, to encourage children to save and spend thoughtfully by being financially literate from a very young age.
Some parents lack adequate financial literacy and may not feel confident enough to relate financial matters to their children. Some feel it is too early to expose children to money and finance. Some see it as a burden to bother children with financial matters. Whichever way they see it, research has shown that younger pupils can learn financial topics which will enhance their financial attitude and behaviour and may lead to financial competence in the future. However, there is need to guide closely and carefully towards this, to militate against the negative effects of it.
At what age can a child begin to learn about money?
Ages 3 to 5 Years (Pre School)
Children should be taught that material things cost money. From the snacks they eat to their toys, books etc. They should be taught how to preserve their personal belongings, how to share with others and how to say thank you to appreciate gifts. They can have a piggy bank to use and develop financial habits and to set and meet financial goals.
From age 6 to 10 (Primary School
Children should be taught pricing and budgeting. They should know affordable shops to buy from. Parents should explain their choice of items to their children, the choice to use certain brands, the worth and value of the products they buy as compared to others. Then relate the price differences with their values. Children should know how to negotiate prices and retain same value.
Ages 10 to 17 (High School)
At this age, children should be able to understand more sophisticated money management because they have started spending money on their own. They have started going to shopping alone, seeing price tags, comparing prices, quality/quantity and their values. They need to be grounded in financial education at this level, understand the difference between want and need and the value of each penny they spend. Because they are not working yet but are spending, they need to be taught to prioritize their expenses, be prudent in spending and also understand their spending capacity. This is because they may have friends or classmates whose parents are more comfortable and who spends more than they do or use more sophisticated things than them.
From age 18 upwards
They are already adults and relatively independent. Some children are working and earning at this age and only need detailed guide on savings, spending, investment and returns. They must have had some personal experiences in this regard. They need to read books on finance, understand products differences, market value and other economics terms that are useful in money management.
It is pertinent to note that for every parent to instill positive financial values on their children, they must learn to say No to them at some point. Part of developing children financial wellbeing is by teaching them lack through practical examples. They cannot have it all, nobody does. They must understand that though lack limits access, it propels savings and savings yields interest.
Apart from parents, schools and caregivers are implored to help children develop financial literacy skills that will help them plan for their future. There should be open conversations about money and they should be encouraged to save money, have value for money and be financially literate.
Ways to Improve Children Financial Literacy
- Catch them young. Let them start early. Children should grow with the knowledge of money and indepth understanding of it’s concepts in an age appropriate manner.
- All hands must be on deck in creating this awareness. These includes parents, teachers, caregivers and even in their external environments like church and in social activities. Just like there is money involved everyday in a child’s life, money management should be part and parcel of raising a child.
- The knowlege should be practicalised. Theoretical explanation won’t be enough without proper experimental learning. Our daily activities involve money so children should be given instances of such as it pertains their daily lives.
- They must understand the concept of value. This is the foundation of savings, prudency and gratitude. Children must be taught that no matter how little an amount is, it must be earned and valued. Like the popular adage that goee, money does not fall from trees, its acquired through hardwork.
Amara Ann Unachukwu
