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. How then do we go about this? Let’s see solutions.
1. Change your 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 the money we 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.
2. Make it fun – gamify if you must
Children (and even Teens) have a very short attention span. Even normal classes on finance and economics are sometimes seen as boring. So how do you ensure your young one learns, understands, enjoys and apply 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 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.
3. Decision and choices
Every parent has been in a situation where their child demanded what is basically not essential. While saying “No” may be a tempting response, it may not convey the why. A better way might be to educate the little one on the opportunity cost of such request and guide them to a logical conclusion. Even if not seen (yet) by them, you can help them understand “the why” to your refusal. This can be helpful when they come along for grocery shopping. When done right, kids will see that they always have choices and will step back to evaluate their decisions before making them.
4. Give them pocket money but hold them accountable
While it’s entirely up to you if your kids should have an allowance, and the appropriate age, 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.
5. 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 way before they become independent. They also learn how to set and pursue goals which will serve them in other aspect of their lives. They also start to understand the business numbers behind the career path they want to choose.
6. 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 afterwards. Give them assignments to critique a financial solution or come up with ideas to raise capital for their dream business. Don’t limit them.
7. Let them enjoy the risks and rewards
When kids do well and show promise, say they hit their savings target for that toy they want or make a wrong decision, allow them to experience the consequences good or bad. Don’t deprive them if they succeed, neither should you be quick to rescue them if they fail. Rather applaud and advice, help them sieve the valuable lessons from the process.
8. Talk to them often to evaluate
Communication and even learning are two-way. The process is more important as well as the short term destinations. Talk to them, listen to them and gauge the learning and growing process. Of course, they will make mistakes and triumphs, help them reinforce good monetary behaviour and discard irrelevant ones. This will also help the bonding process. When they become young adults and need financial advice, guess whose advice and opinion they’ll seek and respect – yours.