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Financial Education for children

 

Growing up, we never knew or were taught about the importance of money. We always had an impulsive way to get what we wanted. However, now that we have grown and married with kids of our own; we need to imbibe in them the value for it. They need to understand that not everything comes free.

We, as parents take a lot of pride in raising our kids and teaching them the rules and manners about various things. We teach them about important things like how to drive, how to behave and respect others. However, the important things like being generous, knowing the value of money, being responsible; these teachings are mostly overlooked.

Teaching financial responsibility to children

Primarily, we as parents need to categorically tell them the meaning and difference between needs and wants. Furthermore, we can make them understand how money management is done.

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Wants vs. needs

A want is something that you would want to have because somebody else has it or to have an instant gratification purpose. A want is like a desire which may or may not is fulfilled due to its affordability. A need is something that is important to have without which we cannot survive. The basic survival needs like food, clothing, and shelter. For example, we see young kids who are addicted to gadgets like tabs and phones with latest trends and technology. A child may try to compare his simple Nokia phone with an iPhone which has the newest technology and ask for it. However, it’s essential to make them realize, that you need to earn a high-end phone by making money. Having a simple phone is a need, but having an iPhone is like a luxury. The difference requires to thought with examples and explaining them with different ideas.

Value of saving money for  rainy days

Majority of kids in their teens have been using credit cards excessively, and this has become a trend among most youngsters. Owning a credit is important, however, knowing when to use it is more important and this needs to be taught to the younger generation. Family emergencies and educational fulfillments or adversities can crop up unexpectedly, and this has to be made aware to the kids.

Saving money

Teaching your children the ways of money management is necessary. Do we need to educate kids on how to save? When to spend? How and what to invest in? When can you donate?  These things need to be taught to them. The smaller kids can be taught how t save their money by maintaining a piggy bank. This way, kids will know how to control their money and will feel responsible for managing it. As kids start growing older, you can begin teaching them about spending practices and how to save money.

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