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How to teach your kids financial literacy

Babajide Okeowo

Attaining financial literacy should begin at a very early stage. It is not easy to teach children and teens about life, let alone money. Most adults are still finding it difficult to wrap their heads around it themselves. However, if we must grow a generation of prosperous citizens, we must educate and prepare them to handle resources, chief of which is financial at a very early stage. The steps below if adhered to will go a long way towards educating children about money.

Change your and their mindset

Let’s face it, there are several myths about money; they are so rampant that some believe it to be absolutely true. Money is bad, money is evil, learning about money makes one greedy and so many others. These are just a few misconceptions about money that most people have today. To train your kids well about finance, you need to change your mindset about money first. Another major notion to dispel is that children are too young to know about finance. This is not true. Kids are smarter than we give them credit for. Don’t start with a wrong premise, so you can position your kids to make smart money decisions in future.

Make financial education interesting

Children (and even teens) have a very short attention span. Even normal classes in finance and economics are sometimes seen as boring. So, how do you ensure your young one learns, understands, enjoys and applies smart money principles over time? The answer is simple – ‘gamify’. Teaching children money lessons in a lively fun way helps them see money as a tool and not an end; it also helps them grasp the concept faster. Another way to engage them to allow them to play both manual and virtual money games. Games like Monopoly can help drive the lessons faster while having fun. Older kids can also be taught investing, using online simulators.

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Give them pocket money, monitor how it is spent

While it’s entirely up to you if your kids should have an allowance, the appropriate age, which they should have it, amount and frequency it should happen; it can be an avenue to teach them a lifelong money lesson. Planning, budgeting, proposal, accountability, fiscal discipline, delayed gratification, goal setting, savings and investing are concepts that can be hinged on this. For instance, you can work with them to save and spread the payment of an item they want over time, while being accountable for their own (little) finances. The thrill of experiencing delayed gratification will serve them for life. They can also learn simple money concepts like interest and compounding. The pay-offs here are vast and impactful.

Teach them savings and goal setting

This is similar to the above. Helping them understand why they should set aside a fraction of their allowance is only but part of the money learning curve. Knowing where to keep it and how to keep their records is also a desirable fiscal skill. For instance, opening an Access Bank Early Savers Account will give them the confidence they need to handle finances before they become independent. They also learn how to set and pursue goals, which will serve them in other aspects of their lives. They also start to understand the business numbers behind the career path they want to choose.

Take them on bank trips and business meetings

Think about this – when was the first time ever you entered a bulk room of a bank? How did you feel seeing so much money? Chances are, the earlier you got used to seeing (and handling) money in bulk, the more confident you are about money. Even if it’s not yours. Take your kids on bank runs when you can, give them money to count.

When on holiday, take your teens to business meetings and brainstorming sessions (ask them to behave and talk to stakeholders beforehand) and ask them what they learned afterward. Give them assignments to critique a financial solution or come up with ideas to raise capital for their dream business. Don’t limit them.