Get involved now. Help us provide financial education and management skills.

Children & FAME

4. Children & FAME 

In this part, let’s talk about the importance of educating children about financial independence. From the time children understand the world around them, parents and everyone around them must bestow financial education. It is a well-known fact that children assimilate at a young age tend to stay affixed than what they assimilate when they grow up. Therefore, you will not get a better opportunity to educate them on financing and fame. 

Explaining Financial Management to Children 

Understandably, parents get confused as to how they have to begin this conversation with children. When considering this, the parents can involve children when they manage finances even though they don’t have to involve them in huge tasks. For example, buying groceries would be a perfect activity to get started. However, you shouldn’t try to impart theoretical knowledge to children as it won’t be effective. If you involve them in a few financial activities, they will receive the comprehensive knowledge required. 

Following activities are highly encouraged to practice with kids: 

  • Set aside weekly or monthly pocket money as a practice of financial management– as for research, it is stated that kids who have the habit of dealing with pocket money are more financially decent than the ones who get cash on demand. If you allocate weekly or monthly pocket money, the child will understand that this is how you should manage money. He/she will also try to mimic you when spending the pocket money. Moreover, it will help the child to develop the habit of saving. Money management is one of the important skills that a parent should offer the child. 

 

  • Manage a piggybank- this is a widespread saving technique followed by parents for a long time. Piggybank is basically a saving system handled by a bank to save small deposits for future use. As parents, it is vigilant to offer the piggybank as gifts so children will treasure it more. After gifting it, explain how it works and request them to deposit money from their pocket money. Even though some kids might not like doing it, eventually, they will love doing it. You can purchase something a bicycle when the deposits reach a reasonable level, so kids will realize that they can purchase things by maintaining piggybank. 

 

  • Help them learn how to make money– Next best option is to help them understand the importance of making your own money. Teach them money management and income streams so that they will allocate their spare time to it. For example, some parents motivate kids to engage in volunteer activities so that they will realize the importance of money. Some other earning options might be to help them use their talents to make money. For example, making handcrafts if your kid is talented at it. These experiences will stop him/her from unnecessary spending. 

 

  • Motivate them to ask questions- Some parents have the habit of shushing the kids when they ask questions. This is wrong in all sense. You should let the kid question so that it helps him/her ponder, analyze, and decide. Questioning is a food habit that shows healthy skepticism. Of course, we wouldn’t deny that sometimes it gets annoying when you are constantly questioned. But remember, this is for the long term benefit and the future of your kids. It also helps them to widen the scope of thinking. Even schools should promote questioning culture as kids spend more time in school. Besides, in a classroom, kids are not restricted to anything so they can flow through different perspectives. 

 

  • Recording the expenses- it is obvious that some kids might overdo certain things, including money management. They might spend all their savings/earnings in one-go. This is why it is important to teach your kid to record expenses. You don’t have to stop him/her from spending. Instead, teach the kid about the aftereffects overspending. Additionally, help him record all the expenses to keep track of what he is spending. This will soon become a habit. 

Tips for Discussing Money Problems with Children 

Who doesn’t like to keep their kids well fed and secure? But there are instances when financial burdens can’t be avoided. So if you have never taught or showed financial difficulties to kids, they might become arrogant and stubborn even if you explain to them that you are financially down. 

This is the main reason why it is essential to explain kids about the financial difficulties that families go through. But it can be tricky when it comes to conveying the money problems. So we will help you with a few tips below to avoid tension and stress: 

  • Explain the reason for the financial problem– you can perfectly explain the problem if you make it clear the reason for the problem. Though kids are small, they have an excellent level of understanding. For example, you can explain the current situation in the world, and people are losing jobs, including yourself. And so there will be difficult times which must be managed with the savings you have. At first, the child might not take it clearly, but after some time, he/she will understand your situation. By explaining the problem, you will be able to manage the child better. 

 

  • Take the courage- Once you have explained the situation, the kids might get worried, but you must console them, saying these are just temporary issues. You should also say that as a family, it is pretty easy to overcome financial challenging. It is also important to mention that by cooperating with one another, the financial crisis can be managed. Along with that, make sure to say that there will be lifestyle changes that they, too, have to make small sacrifices for the family. While explaining this, you might be bombarded with questions yet remain calm and handle the questions.   

 

  • Tell your plan to solve the financial crisis– They deserve to know how you are going to handle this situation. This is important because kids should be part of the problem and part of the solution. When you are explaining the solutions, they will eventually start trusting you and your solutions. It is essential for a successful family life.