Sometimes, parents often postpone talking to their children about money because they think their children are too young to understand finances. Some parents also feel uncomfortable talking about money in general, so they avoid the topic.
There are many simple concepts about finances that we can introduce to children from an early age. Reporting from Huffpost, here are 5 things we should immediately teach our children.
1. Understand the Value of Money
Illustration/Photo: Freepik.com/Apiraka
“Understanding the value of money means understanding what it takes to earn, manage and grow it,” says Bola Sokunbi, founder and CEO of Clever Girl Finance.
To teach this to his own children, Sokunbi let them spend the pocket money he gave them on buying sweets, leaving his children with nothing left to save and making them think about how to save or invest in the future.
Small exercises like this are necessary so that children can make good decisions in the future when they are faced with bigger financial problems. Parents face the challenging task of helping their children understand how big an impact money has on their lives and also letting them know that accumulating money is not the most important goal.
“Money is just a means to an end. By defining the end goal, we can manage our finances effectively. We must prioritize cultivating a healthy relationship with money in children, ensuring they understand the value of money in pursuing their dreams,” said Ramona Ortega, creator AI-based financial advisor, WealthBuild.
2. Know Financial Intelligence
Several things that must be taught to children from an early age according to financial experts/Photo: Freepik.com/jcomp
Financial intelligence is a skill that is trained, not innate and money is a tool we can use to increase our financial intelligence.
“This is a tool that requires knowledge to function well. However, everyone should learn it,” said Kara Perez, a financial educator and founder of Bravely Go, a financial education company.
Teaching children about financial intelligence can be done in simple ways, such as opening a dialogue about how they want to spend their money.
“Talking about how much money they have to spend, where they spend it, and where the money comes from is a great starting point for them to understand and opens the door to lifelong money conversations,” explains Perez.
3. Money Supports Joy and Health
Several things that must be taught to children from an early age according to financial experts/Photo: Freepik.com/erstudio
Rita Soledad Fernandez Paulino, founder of the financial education community Wealth Para Todos, said that the most important lesson she wants to teach her children is that money is a tool to support personal integrity, including joy and well-being. This includes well-being in the present, in the near future, and after retirement.
The best way for parents to teach this to their children is to set an example of how we use money for self-care wisely.
“Whatever parents do really becomes normal for children and what they believe is acceptable. So, be careful about that,” he said.
4. Money Is Not a Taboo Topic
Several things that must be taught to children from an early age according to financial experts/Photo: Freepik.com/namii9
Shang Saavedra, financial coach at Save My Cents, found that people who feel unprepared when it comes to personal finances are those who come from families where money is taboo to talk about.
Therefore, Saavedra recommends that parents start discussing financial topics with their children from an early age, while sticking to age-appropriate topics.
Like 4 and 5 year old children where they are starting to be able to count, they can start to understand money as a concept. For high-level topics like money as a means to an end, Saavedra will probably start introducing the concept when his children are in middle school through high school, where they start to have their own dreams for the future and have the rational ability to achieve their goals. .
5. The Importance of Saving
Several things that must be taught to children from an early age according to financial experts/Photo: Freepik.com/patcharin123
Saving is very important to prepare for emergencies. However, we also have to save to have fun. If children are very young and may have pocket money, they can be taught to set aside some money for savings.
Teenagers are better able to understand financial matters and should be encouraged to think about how to save. Parents can indicate that purchases they want to make or activities they want to try can be done with a savings plan.
Sometimes parents are afraid to teach their children about money because they are afraid of financial mistakes they will make. However, all parents can teach their children about finances based on previous experiences. Sharing what we have achieved financially and what mistakes we may have made is a powerful way to educate our children.
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