Today, we will discuss the importance of financial literacy for children.
We love to talk to our children about culture, history, mycology, characters, Etc. But when it comes to money matters, we think the children are not big enough. since we should not forget that, today's world going to be changed day by day. It is important to teach financial literacy to your children.
Financial literacy for kids part:
Needs and Wants
Have you ever had to decide between something you want? And something you need? Do you know the difference between a need and a want?
No, never. Difference between a need and a want can help us become better at practicing financial literacy.
Let's start with needs a need is something that is a necessity. Meaning you needed to survive, like food, Water, Shelter, and Basic clothing are ones.
On the other hand want, is something that would be fun to have, but you can live without, for example, stuff, used for recreation, like toys or games for that new expensive pair of sneakers.
Where's most of the financial decisions you will make involve needs or wants?
Which is why understanding the difference is so important. If you are deciding between whether you will eat today or whether you will buy a new video game, the decision probably seems simple. I'll take the food. But sometimes you will have to choose between two or more wants. This is called an opportunity cost and opportunity cost is the cost of missing out on the option. You did not pick. Let's Frankie as an example. Frankie wants to buy a new pair of rollerblades, which cost $85, she has earned forty five dollars from mowing her neighbors, lawn and running her own lemonade stand her grandmother. Gave her $20 for her birthday. She finds out that the rollerblades she wants, will go on sale for $65 for one day, only on Friday.
Later that day. Frankie's best friend, invites her to go. See the latest superhero movie at the movie theater, with some friends on the same Friday, the roller blades will be on sale the movie popcorn and soda will cost around 20 dollars. What should Frankie do by the rollerblades or go to the movie? If she chooses the rollerblades, she won't have enough for the movie with her friends. On the other hand, if she chooses to go to the movie, Her opportunity cost is the roller blades. Not being on sale anymore, which means she will not have enough money to buy them. Hmm. Frankie must decide what works best for her. Buying the rollerblades on sale or the movie with her friends. She also must decide if she wants to spend all $65 of her saved money or just part of it. These decisions are personal and the consequences are not life-threatening. It's about choosing which you value the most, when you decide or friends. What would you choose and why? The next time you are deciding between two or more costs, try making a list of pros and cons and go from there before, you know it, you will be making financially, responsible decisions using your fabulous financial literacy skills.
So, Become financially responsible individuals, teach these five Financial mantras to your children when they are small with the help of a piggy bank, teach them the power of savings, second they should be that borrowing should be avoided. Strictly hardly introduce them to this concept of power of compounding, so make them write budgets because expenses when they are small and Faith, introduce them to banking operations and simple Financial terminologies. It is not about only giving Financial education parents should themselves be financially discipline lives. So that children observe them under the ACT. Age is no barrier to learn financial literacy so the sooner the better start the Journey of your children towards financial literacy now.