It is difficult to understand child psychology so you need to take extra care when you are raising the topic of financial information with your kids. Kids need everything in todayís world, from the latest gadgets to toys, stationery and clothing. Todayís kids have become inquisitive and demanding so it is crucial that you start educating them about finance from a very early age. They should understand that considerable efforts and time go into earning money and that money does not simply come from your wallet or from the bank.
Before beginning the journey of financial education for your kids, you need to make sure that you are patient with them. As their financial acumen is miniscule when compared to your level of understanding, donít expect them to become financial experts in just one day. Set practical examples for them which will make them easily get the concepts and value your financial decisions. In the end, you need to teach your kids to understand the value of money; so modify your behaviour so that they can learn from you.
Here are some things you can teach your kids in different stages of their childhood:
Ages 5-8: Teach them where the mother or father gets the money from and what the source of income in the family is. The first lesson would be to show your kids different notes and coins that tell them that everything like goods and services need to be purchased with the help of money. So the items that you recently got like the new clothes, new lunch box or the new toys have a cost which is paid by using this money. Once you introduce the concept of what money is, you should educate them on where the money comes from. Make them understand that hard work and time is what gives you money and not the ATM. It is not very easy to make kids understand at this age. Hence, teach them with practical examples that when you go to office, you earn money because of your hard work and this money is kept in the bank for safekeeping. As and when money is needed, it can be withdrawn from the ATM. Let them know that money is really important, and only if you are willing to work hard will you get money.
Ages 8-10: In this age, the kids are a bit more mature.