We live in a society where money is very important for everything, but we are not taught from a young age to manage it correctly. That is why it is so important to understand why children should learn about financial education from an early age. It is the key to both personal and social economic development and therefore, your children should have knowledge about it from a very young age.
What is financial education
Financial education is based above all on having financial knowledge from when children are young so that they learn to manage money well. Knowing how it works, how to use it responsibly and why it is important to save.
Children from a young age will know that money is hard to come by and that parents do not have infinite money. It takes effort and sacrifice to earn it and it is essential to live… That is why it is so important to learn how to manage it to meet both present needs and those of the future.
Financial education from childhood
Currently, people with studies in finance or who inform themselves on the subject, are a small part of the population that understands how to manage money and understands everything about it. This should not be the case and it has to be changed by teaching children, it is not so complicated if it is taught in a simple way, so that they can understand it.
To make it easier, we are going to give you some keys that you can use daily in your home to teach your children.
Consume responsibly
For children to value what they have, it is essential to consume responsibly and be the best example for our children. They must understand that family planning must be done so as not to spend more than is really needed, having a family budget for the different expenses, for example.
learn to save
Saving is important because you never know when there will be moments of need that require a greater investment, such as when you have unforeseen expenses. But in addition, you can also save to treat yourself without having to use money from the family budget.
With savings, children can begin to understand the value of things and also about basic mathematical concepts. On the other hand, they will be aware of something as important in life as the value of effort and the common good.
What to do when savings run out
When there is no money, two important concepts must be taught to children: the emergency fund and the loan. But you have to explain to them that they require great responsibility and that they can only be used in times of real need.
The emergency fund is when you have money saved that is not touched and that is only used when an emergency occurs and no other money is available to be able to meet that payment. To have this emergency fund it is essential to always save and deposit an amount of the budget to this.
As for the loan, you have to know that money is lent in exchange for it being repaid in installments but usually with interest that is usually abusive. They lend you an amount of money but you will have to repay a larger amount. It will require a later effort to be able to return that money received previously and a lot of responsibility to carry it out.
Games to understand it better
Today there are board games that children like very much and that allow them to learn almost without realizing it. A good example is Monopoly Junior where you learn to buy and sell, even if it is in a playful way.
Parents need to take into account the importance of this learning from childhood so that when their children become adults, they know how to manage and handle money responsibly. Even to produce their own money instead of earning a little by fulfilling the dreams of others… working for themselves in what they really like.