During Financial Literacy Month, it’s essential not only to assess and improve our financial skills but also to focus on the financial education of our children.
By the time a child reaches ten years old, there are specific milestones they should ideally achieve to develop a strong foundation for financial understanding.
In today’s unpredictable financial landscape, ignorance about money matters can lead to difficulties in the future. It’s crucial to equip our children with the necessary knowledge and skills to make informed financial decisions and build a secure financial future.
Teaching financial literacy to children early on can instill valuable habits such as saving, budgeting, and understanding the value of money. By empowering our children with financial knowledge, we can help them become financially responsible and better prepared for whatever challenges they may encounter in adulthood.
So however much anxious we may feel about money. We don’t know enough about it. Kids should preserve their innocence as long as possible—we cannot allow these feelings to cause us to pass financial ignorance on to another generation. Here are some of the financial lessons your child should learn by the age of 10.
The ability to differentiate needs from wants
Young children often have trouble distinguishing between a genuine want and need. Everything seems like a need to children. It will be essential to teach them to delay gratification so that they can devote their financial resources to what is essential, like saving for a rainy day.
When teaching your children about needs versus wants, consider pointing out items like food and clothing as you shop and ask them to tell you which category each fits in. Understanding the difference between needs and wants is a bedrock concept that can lead to a lifetime of better financial decision-making. Needs include the basic things we need to survive – food, clothing, and shelter.”
The value of saving money
If you gift your child some money, this is the perfect opportunity to teach them about setting aside cash for savings. When your child is younger, buy a piggy bank and add coins and birthday money. Between the ages of 3 and 5, your child should understand that it takes money to purchase things. As your child gets older, set up a kid’s bank account and teach the basics of banking. Several banks, such as KCB, family bank, and KWFT, have special bank accounts for kids.
The basics of investing
Once your child reaches 10, they should understand what a stock is and how to purchase one. You can aid the learning process by exposing your child to games about stocks to make it fun. The Stock Market Game is one tool to consider. This game allows users to test their skills by investing in virtual cash. “While minors can’t own stocks or open brokerage accounts in their names, parents can set up custodial accounts for their kids. You complete a form with the child’s name and your name as the custodian.
The dangers of online scams
By the age of 10, your youngster should understand the dangers of sharing personal financial information on the internet, such as credit card and bank account numbers. Websites such as OnGuardOnline.gov can give you tips for keeping your child safe online.
