Financial lessons to teach your child before high school, here's how

Teaching and learning go beyond the barriers of age and space and can happen anytime in life. Mostly, schooling starts at the age of four to five years of age, but literacy can start as early as one wants. Education is not just formal education which is backed by notebooks, books and a fixed institution. It is also to be noted that formal education works through a fixed curriculum which cannot possibly be comprehensive, especially in terms of financial literacy. Financial literacy is a very prominent subject of concern which is not included in formal education and should be taught to children at home for parents most often start giving money to their children by the age of ten to twelve. Before your child reaches high school, it is imperative for it to know how to handle money wisely. Here are some tips for parents to teach your child the basics of money and all that it involves.

As children get access to more money, either through their home or from a part time job, they tend to be inclined towards spending most of it. Teaching them how to save and the importance of doing so is one of the most crucial things to do, for spending comes naturally but saving hardly ever does which it makes it even more necessary to teach them how to save especially in teen age when part time jobs make money an everyday reality.

Earlier, children would keep their savings in a piggy bank, but with time newer methods of managing money have come into existence. Private bank accounts and debit cards have now come into popular usage, all of which should be introduced to children. Giving them access to modern banking tools will familiarize them with these tools and build confidence in them.

This comes after teaching the child the very basics of saving. After your child has set goals for saving money and has actually started practicing saving, it is time to teach them how to design a budget for themselves. It might sound extremely complicated but it is as simple as writing down all actual and expected expenses in one place and working around money with reference to it.

If your child has not yet engaged in part time jobs and other sources of making money, it is advisable to start offering them a fixed allowance in exchange of chores that they perform around the house. But it is even better to not link the money with work and offer an allowance rather offer an allowance as a gift along with instructions about spending and saving. Direct and explicit conversations around money will help much more than anything.

Involving your child in family budget planning and bills. It doesn’t, in anyway, mean that you tell your children how much you’re bearing but going over bills for the household in the presence of children is recommended as a good way of involving them in the family’s expenses. Having conversations around managing bills and minimizing them is also important to involve and make children aware of the financial situation at home.