Financial Literacy

The Gift That Keeps on Giving: Financial Literacy for Kids

Financial literacy encompasses the knowledge and skills required to make sound monetary decisions. Educators are pushing to including financial training in school curricula. However, parents remain the primary individuals responsible for teaching their children fiscal responsibility. This can create a problem, however, as some parents mistakenly believe that their ability to teach their children about money in proportionate to financial success.

Where Does a Parent Begin?

Firstly, it helps to have a clear understanding of the meaning of financial literacy. According to the online economics repository Investopedia, financial literacy is the understanding of money and business coupled

Saving money is a primary tenant of sound financial management. Financial experts recommend that earners save 10-percent of their income. The concept is called “paying yourself first” and help individuals pay for large future purchases.

One way that parents can use to teach their children how to save money is to help them to understand how to distinguish between wants and needs. Another way that parents can teach sound financial skills is to open a bank account where their child can familiarize themselves with the habit of making regular deposits.

Planning for the Future

The next for parents is to teach children to establish savings plans for short, medium and long-term goals. This will give the child a clear understanding of how money they need to earn and save each month to meet their goals. Price shopping is another vital financial literacy skill. By searching for the best price for desired goods and services, children will learn how to have more money to hold in savings. Finally, it’s important to teach children how to shop with logic versus emotion and to avoid scams and rip-offs designed to separate hard workers from their money, while offering zero return on their