Importance of financial literacy and tips on how you can instil it in your child from a young age

In today’s fast-paced and consumer-based society, financial literacy has become a necessity, not a luxury. However, the truth is, many adults today never learned about money management in school.

Starting the conversation about money with children can help them develop lifelong habits. Here’s a look at how you can do it:-

Why financial literacy matters

Financial literacy involves much more than teaching children to save money. It educates them to earn, spend, save, invest, and give back money. Many experts believe that children who have knowledge about money at a young age tend to have the right mind-set about money and avoid debt.It is importance to teach kids how to manage personal finances enhances critical thinking and responsibility.

Not many parents realise how this is a life skill and is not taught at school. Parents should start is early and it enables them to develop into responsible adults who think ahead, take calculated risks, and appreciate hard work over wishes.

Start with simple money concepts

Young children require no elaborated lessons regarding money. They should begin with something as fundamental as the identification of coins and money, the fact that money is typically earned through labor, or distinguishing wants from needs.

Routine errands, for example, purchasing groceries or bill payments, can be great teaching opportunities when couched in simple explanations.

The right age to begin saving

Saving money can be an excellent way to instill money management skills in the individual. Setting up a piggy bank or a designated jar for the child to save money in makes it easy for the youngster to count the money they are setting aside. This habit will oftentimes guide them for their future financial planning and strategy in life.

Inculcate the value of earning

It would also be important for children to understand where money really comes from. Assigning them chores accordingly to give them allowances would help them understand the correlation between working and earning.Also assists children to make valuable spending decisions when they understand the hard work that goes into earning what they want.

All these things teach the children the control of impulse or the significance of taking considered decisions, including a financial stress-free life in their adult years. Money is never a topic that is best avoided in the household.