Parents often do not try to teach their children how to handle money. As a result, children have bad financial habits: they live beyond their means and misunderstand monetary relations and simple economic processes. At this time, other parents are trying in every possible way to encourage their child’s interest in finances. For example, many schoolchildren are already aware of what cryptocurrency is, and may even play games where they receive cryptocurrency for completing various tasks. And then these coins can be converted into real money. Children, for example, really like the game Axie Infinity, which is in the top 5 crypto games of 2022 in accordance with buidlbee.com.
In this article, we have collected the basic techniques for children of different ages that will better introduce them to finance.
Age 3-7 years
At this age, it is necessary to instill in the child an understanding of income as a result of work. It is important that he knows that his parents work and get paid for it. This is the beginning of the formation of financial literacy in children. Tell your child about your success at work or even bring him there to show what you do. But explain that money is not the only measure of a relationship. This will help to avoid obsession with pocket savings. Show that you do housework, not for the sake of remuneration, but because you take care of the family: “I will mow the lawn so that it will be pleasant for us to look at it and play comfortably together.” Show your child coins and bills of different denominations and do not be afraid to include them in in-game scenarios.
Age 7-11 years
Teaching children financial literacy at this stage helps in communicating with adults and classmates. By elementary school, a child should be able to make purchases and understand what exchange and change are or how card payment works. This is important, at least, for the purchase of lunches in the dining room. Give him a piggy bank so that he puts money and gifts there. In the lower grades, introduce the child to shopping in large stores and the meaning of the receipt. Ask him to pay at the checkout himself. Try not to indulge the momentary desires of the child in shopping. Tell your kid that things have their own price and why each of them costs differently. Then make a child’s wishlist and determine what he needs to do to buy it. You can also read various specialized books together. Also, the legendary board game “Monopoly” is a great option for teaching budget and planning. “Monopoly” develops economic thinking, purposefulness, and attentiveness.
Age 11-14 years
Financial literacy of school-age children is aimed at working with the first budget and accumulation skills. The child can be introduced in detail to the concept of pocket money. If you give them to him regularly, he will begin to make his first budget, comparing expenses and income. From the age of 11, the child already understands who earns money in the family. However, he perceives the salaries of adults as endless in amounts, since he does not think about spending on products, things, and other services. It will be good if you show trust and be honest with him, telling him what the main items of expenses you have. To teach children financial planning, agree with them that you will give them money immediately for the whole month. Explain that they need to plan their expenses correctly and “stretch” this budget for the entire term. If a child has asked you for money ahead of time, warn him that next time you will not help him until the beginning of the new month.
Age 14-18 years
This age is a rehearsal for adulthood. It’s good if a teenager gets a job at least for the summer. You can help him with this by agreeing with family friends or other parents so that the teenager does not experience unnecessary stress in a completely strange company. It is important at this moment to tell what the essence of contractual relations is and how to distinguish financial fraudsters in time. Invite your child to keep a regular financial plan. Personal planning may not be long – up to a year, but it will teach him to clearly achieve goals. Distribute income on necessary and secondary expenses, while saving 10% in the piggy bank, and 5% as a financial cushion for a rainy day. It will be interesting to read the teenage version of the famous book “Rich Dad, Poor Dad” by Robert Kiyosaki.
We hope that this article will not only help you show your child the world of finance but also allow you to have fun together.