Have you ever dealt with your kids having unlimited desires? You may often feel you are running out of patience. While it may appear that your kids are simply being, kids, this kind of behavior is actually intimately related to your children’s concept of money. Let FinPod explore some of the common misconceptions about financial education for children and explain the benefits of teaching your kids about money management early.
How Do Young Kids Learn About Money?
One might think: Why is it important for a young child to learn about money when they don’t need to work and have little to no money? Well, in fact, young children in kindergarten or elementary school can already start applying the idea of money management to many aspects of their daily lives. Consider a scenario where you and your youngster are browsing at a toy store together: You can make purchasing the toy of his/her choice as a condition (reward) and request that your child study and perform well on the upcoming school test (work/mission). The child will then attempt to finish the “task” in order to receive the “reward”. Through this exercise, the child would get the idea of having to work and earn for a reward, and then consider how to spend it wisely on what they want.
Through instilling in the child the idea of work and reward, the child will subconsciously absorb and adapt to the tenets of how society functions, while realizing that many things in life are conditional exchanges and do not come from the heavens. In the long run, this will teach kids how to manage their resources on hand (i.e. money) and their decisions regarding saving, investing, and spending must all be properly weighed.
Will Early Financial Exposure Make Children Utilitarian?
Out of fear of their kids wasting it or being taken advantage of, many parents might tend not to give too much freedom to children to manage their savings or even get their hands on money. In addition, they are worried that their children will become money-minded and greedy. Well, contrary to what one might think, “money” is not quite the root cause of all evil, but instead if given a clear idea of how much money they have, children will learn how to act within their affordability and avoid overspending given their financial limits.
Money management and financial literacy are more than just talking about it, but also involve people’s capacity to utilize resources and their sense of judgment about many issues. As one would reasonably argue, “being able to make money” does not equate to “understanding how to master money”, as we have seen how money mismanagement could lead to pretty dire outcomes for adults. It’s hence crucial to give them exposure to money in real-world experience and let them have it early. Give your child the option to decide how to handle money, such as saving it for later use rather than just spending it all, starting with as little as a few dollars. After all, financial education encompasses more than money per se – perhaps letting loose the leash and allowing children to start making decisions and taking initiatives may be the first of many steps to learning about sound and longer-term financial planning!
How will financial literacy benefit my children?
Parents worry that their kids won’t be able to see the big picture and consequently make all of the decisions for their children. Naturally, children are used to grown-ups being in command of all aspects of their lives. This ultimately hinders your kids’ ability to be independent. Learning how to handle money and thus how to set goals are both necessary to let your kids grow: They need to understand money before they can learn not to spend money recklessly, or make spending decisions based solely on their emotions.
One of the important things about setting goals for children is to help them develop self-discipline. You’ve probably had the experience of having to perform a task at work for which you have no idea why and what it is for. Your motivation and performance would certainly not be the same as something you care about with a clear objective in mind. Your child similarly requires a purpose that serves as an engaging goal to get them moving. While it may begin as a straightforward objective, like saving money to buy his/her favourite toy, as kids become accustomed to this pattern of working toward a goal and having to make sacrifices along the way, they inevitably will develop the capacity to organize their spending and their time (and even their lives).
3 Benefits of Adopting FinPod for Kids’ Financial Education
#1 Understand Give and Take
FinPod breaks down every aspect of children’s daily life into manageable tasks and objectives. The parent can give rewards to their child after they finish tasks like housework, homework, or studying. As a result, a positive give-and-take relationship is established.
#2 Introduce the Idea of Relative Value
With FinPod, you may designate various incentives for certain tasks. The completion of tasks that are challenging or time-consuming might be rewarded with more tempting rewards. Children eventually develop a proper sense of money and how to use their resources as they learn to differentiate between values, associate money with certain objects, and relate money to values.
#3 Understand Financial Management Easily
The user interface of FinPod is intuitively designed with easy navigation and graphics that visualize money and finances on clear and organized charts and dashboards. Additionally, the fact that FinPod ties children’s daily routines to their savings and rewards helps to put money into real-world perspectives and lets them learn money management in a more vivid and practical manner.
Download FinPod – Raise Money Smart Kids
100% free to use. Create a FinPod account for you and your children in just 3 mins! You can simply switch between parent’s and kid’s modes on the same phone. There will also be regular community events on parenting and kid education. Experience FinPod today!