In life, money is an absolute necessity. According to West Ridge Academy, you cannot just disregard it as if you don’t need it in your life because the truth is that all of us need it to function normally within our daily lives. Money can either be your ally or your adversary, depending upon how you take care of it.
If you know where to invest it, money can definitely work for you or even grow by itself without you even lifting a finger On the other hand, if you do not understand how it works then it will definitely come back to haunt you, run you into the ground and bury you with all sorts of debts and financial trouble if you are not careful.
If you love your children, you must teach them about financial literacy as soon as possible so that they won’t find themselves in financial trouble when they become adults. Below are some tips from West Ridge Academy on how to teach financial literacy to your kids.
Give a weekly allowance to your child and make him accountable for it. This is an effective way of teaching your child how to budget. Figure out an amount that is just enough to cover his basic needs for one week and give it to him as his weekly allowance. Tell him that it should last him for an entire week because you won’t be giving him any additional money if he runs out and comes up short, unless of course there’s a perfectly acceptable explanation why he fell short of his budget. Should he be able to save some money from his allowance, then he will have the option to do whatever he wishes to do with it.
Convince him to save some of his allowance so that he can buy his favorite toy or bike once he can save enough money in the future. This way he will learn a lot of financially relevant ideas, such as: the economic impact of choosing the lower-priced food or treats (but not necessarily lower in nutritional value) in order to save some of his allowance; or the fact that it’s not easy to accumulate money since it actually takes a certain amount of sacrifice to save for even just a small amount; perhaps he will learn to value his toys even more since he will realize that the money that was used to buy them did not just come out of thin air, but were actually worked hard for by his parents, in the same manner that he is sacrificing now just to have that toy or bike that he likes.
Spend some time to play educational board games with your child which teaches some basic financial ideas. Monopoly, Life, and other board games which teach financial literacy, are fun ways of teaching your child about some financial basics. Be ready to answer his questions as he will surely have many questions to ask you, which will be your cue to explain the general concepts to him in a fun learning environment. You may want to use simple real-life examples that he can relate to, in order to teach the concepts to him. According to West Ridge Academy , by the end of the game you will not only walk away from the game with a much more financially-savvy child, but more importantly, you will have a much stronger bond between parent and child.