We read fairy tales to kids, put them to sleep narrating stories that emphasize the world is a good place and life is easy while knowing in the back of our head that it’s not.
Life is extremely difficult, and children should not come to terms with this fact only when they’re older. One of the most important things that’ll help them survive in the world is finances. As parents, you might provide them everything, be there as financial and emotional support, but things won’t stay the same ever.
One day your kids would grow and have to survive financially by managing their own money. It won’t be easy if they’re not money-smart.
Ergo, your lesson here is that you have to raise them to be money smart, and not depend on time to do it for you. Here are some of the tips that can help you do that.
7 ways to raise money-smart kids
1. Talk about money
If you think talking about money with children is pointless because they’re too young, or “They won’t get it,” “It’s not their age”, you need to think everything through.
Talking about money is essential; don’t wait for them to turn 16 to do that. The sooner they learn about money, the smarter they’ll become as time goes by.
Additionally, by talking about money, I don’t mean lengthy lectures, but practical knowledge about it. Let them know when it’s the best time to buy something, how to save during the holiday season, how banks and ATMs work, things like that.
2. Do money-learning activities
Theoretical knowledge works, but when it comes to activities, nothing can beat them. Why? Because when you put theories to use, you remember your lessons well and for a long time.
Thus, indulge them in activities. Take them to banks, let them buy groceries on a budget, If your kid is too young for that, accompany them to shops, give them the money, and ask them to do the payments and collect change.
3. Be a role model
You can teach them all the good values, but what they will pick up is the things YOU do. Why? Because children imitate. So, you cannot expect your children to be money-smart if you are not money-smart in front of them.
Additionally, while you are at it, focus on positive parenting. Don’t taunt them all the time about money, or the heavy expenses you have to incur on them – Be positive, your goal is to make them money smart not making them resent you.
4. Let them manage their own money
You cannot wait for them to turn 18 and learn to manage their money on their own at ease. In fact, it’s better if they start early – even when they are 10 years old.
Having said that, giving them allowances, pocket money would work if you have teen kids. Let them manage everything in the same amount. You might think it’s cruel, but it’s not if they learn a lot from it.
As for younger kids, you can give them piggy banks to save and manage their own money.
5. Make sure there’s a line between being a money saver and a penny-pincher
It’s ideal if your kids learn to save. However, it’s not if they become a penny-pincher in the name of frugality. There’s a fine line between the two concepts. Being frugal means you do your best to save money by acknowledging your responsibility towards others, while penny-pincher or parsimonious means you don’t spend money at all and depend on people for it.
So, your goal is to not let them become the latter. You wouldn’t want your kids to be financially dependent on someone, would you?
6. Make it fun
Lessons are remembered when they are fun. So if you are teaching your kids money-saving, make it fun. Make them watch movies that might help them understand the value of money, or play Monopoly.
Yes, you heard that right. Surprisingly a game of Monopoly can make them learn a lot about finances. For starters:
It can make them learn about loans.
It enlightens them about property and ownership.
It teaches them money-related concepts such as interest and mortgage, income and property tax, etc.
7. Lastly, inculcate good money habits in them
At the end of the day, it’s all about adopting good money habits. Encourage your kids to do the same. By money habits, I mean the following.
Monitoring expenses in a spreadsheet – every single penny.
Preparing budgets.
Calculating compound interests.
Money-saving.
Making investments, creating a portfolio.
Maintaining a good credit score.
Avoiding the use of credit cards.
You can help them develop these habits by involving them while you do the same, having healthy conversations about these topics, and lastly letting them have their takeaways by watching you follow these habits.
Well, this will do the job. Now that you have these tips, I hope you’d know what to do. All the best! Additionally, if you have a few more tips that can help other readers to raise money-smart children, feel free to share them in the comment section.
Very simply put, financial literacy and education is when you know enough about the crazy world of economics that you are able to make informed and effective decisions with your financial resources. It’s important to be financially literate so that you can make the right financial decisions for yourself, as well as for your family and your future.
Because we don’t learn true financial literacy in school, it’s an important set of skills to develop sooner rather than later in life. Things you should 100% be familiar with include: personal finance, credit cards and debit cards, savings accounts, interest rates, credit score, and money management.
Why is financial literacy important?
The secret to a happy, safe and secure future is financial literacy. The more financially literate you are, the better you will be with your expenses, savings, and investments. So, if you are someone who fails to manage their expenses, makes financial and investment mistakes frequently, it is probably a sign that you lack financial literacy.
Having said that, financial literacy does come with experience, but experience comes with knowledge. So, it doesn’t matter if you are an amateur or a pro at it, there’s no reason why you shouldn’t begin to increase your financial literacy. (You can never perfect your knowledge, but you can always increase it. Knowledge is after all limitless)
Know it’s never too late to learn financial literacy. Growing up, we didn’t know what finances were, we just knew there was usually not enough to go around, and if there was, it meant we didn’t get anything extra, maybe a little less fighting by my parents.
So, if you are in, and want to make a change for a better future, here are all the ways you can improve your financial literacy.
7 ways to improve your financial literacy
1. Read Financial books
When they said, “Excess of anything can be dangerous”, they didn’t talk about books. The more you read books, the smarter and knowledgeable you become. So, if your idea is to gain financial knowledge and you find yourself to be an avid reader, what better way is there other than reading books on financial literacy?
Best Financial Literacy Books
If you are looking for some recommendations, here are some that you must definitely read:
Stop Acting Rich and The Millionaire Next Door, both by Thomas Stanley
The Intelligent Investor by Ben Graham
2. Join an online course
Just as you are never too young or old to gain knowledge, you’re never too young or old to enroll in an online course. You might think that you are past college, your learning days are over. But trust me, when it comes to learning, there’s no age.
Ergo, a great way to improve your financial education is to consider enrolling in courses about financial literacy. You can go for weekend online courses if you cannot make space for them during workdays.
DigitalDefynd is one website you can depend on. For more options, you can visithere. Also, since April is Financial Literacy Month, you’ll often find discounts for courses during this month.
3. Talk finance with the experienced ones
You might frequently forget study lessons, but you’ll seldom forget the important conversations you have with someone. Moreover, when it comes to it, perspectives matter. Talking about financial literacy within your experienced circle would not only provide you with knowledge but develop your perspectives about important things in life.
So, go chat with your boss, friends, or some people in the financial department at your workplace. Those who have the expertise, or experience per se, can give you a lot to learn. Or, if you have the budget, consider hiring a financial advisor to help manage your finances. They can give you financial advice, help you plan for your financial future, and even assist with long term retirement planning. Hiring a financial advisor is a really good idea if you’re dealing with estate planning. When you’ve got that much in the works, a financial advisor can really come in handy.
4. Read financial newsletters and magazines
Remember why we were always told to read newspapers? Because it increases knowledge. Likewise, financial newsletters and magazines would do just the same. So, if you want to witness a change, add financial newsletters to your lifestyle.
Ditch scrolling your phones in leisure time, instead read to boost your financial knowledge.
You can also subscribe to various newsletters of your favorite financial websites to keep yourself updated with the ongoing events. Make it a goal to read at least one article or financial newsletter before going to bed.
5. Practice Budgeting
You might forget theoretical knowledge. But when it comes to practical knowledge, these are the lessons you learn for life. Not only will it make you financially literate about your own budget but enlighten you about new financial concepts.
If you don’t do budgeting, you can start with the basics. Record all your transactions during the month, total them, and now compare the number with your monthly earnings. The total amount you have saved defines your monthly financial standing. Additionally, how you use your saved money is equally significant. If you are just starting, don’t use all of it towards investment – all the more, do not invest if you lack the knowledge. Talk to an expert before you start.
6. Use social media for enlightenment
Social media is a blessing, but most of us use it for all the wrong reasons. Trust me, using it to keep a tab on everyone’s life is not as useful as using it to increase your knowledge. Now that almost all small businesses are establishing themselves on social media, small financial businesses are amongst them too. Follow them; they share tips and knowledge that might improve your financial literacy.
Moreover, you can also use social media to be a part of a network that emphasizes or shares interests about financial literacy, same as yours.
7. Have a mentor
Almost all the great legends out there have someone they feel grateful to, someone who has made them who they are. They had their mentors who inspired them in life. So, if you too can think of someone like that, let them be your mentor. It’s advisable to pick someone who possesses the financial literacy that you aspire to have.
Should Financial Literacy Be Taught In School?
Let me know your thoughts below! In my opinion, of course it should! According to the Literacy and Education Commission, children and young adults need to be taught financial literacy for a plethora of reasons. But, the most important reason is to prepare the next generation for this crazy world of finances.
However, since its not taught at school as often as we’d like to see, it needs to be taught at home. If you’re ready to start talking to your kiddos about finance, check out these 7 ways to raise money-smart kids.
All in all, improving your financial knowledge is not a short-term process, it is not a test you can pass and declare yourself to be financially literate. It’s a journey without an end. You cannot be the best, but you can be better. So, be consistent, don’t wait for short-term results.
“It’s not their age”, you need to think everything through.
children imitate. So, you cannot expect your children to be money-smart if you are not money-smart in front of them.
There’s a fine line between the two concepts. Being frugal means you do your best to save money by acknowledging your responsibility towards others, while penny-pincher or parsimonious means you don’t spend money at all and depend on people for it.
money habits, I mean the following.
books, the 
financial newsletters and magazines would do just the same. So, if you want to witness a change, add financial newsletters to your lifestyle.
everyone’s life is not as useful as using it to increase your knowledge. Now that almost all small businesses are establishing themselves on social media, small financial businesses are amongst them too. Follow them; they share tips and knowledge that might improve your financial literacy.
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