The most important secondary thing in the world is finances and financial literacy. To prepare children in the best possible way for the future to become independent, you will have to teach them a healthy attitude towards money from a young age.
You must have had the opportunity to google the terms such as “kids bank card“, and “methods of learning financial literacy”, but you ended up being confused by the multitude of results. Don’t worry, we will explain to you the best ways and methods so that your children have the right foundations for financial literacy.
First of all, clarify to them the money
Children must know that money is earned through hard work, and that money must be treated with respect and appreciation. Money does not come from magic machines (ATMs), nor does it fall from the sky or grow on magical trees.
The wants and needs
A very important and crucial thing is to demarcate the difference between need and desire. Parents earn money hard, and when their salary arrives, they have to distribute that money to numerous expenses such as paying rent, mortgage, loans, bills, food, drinks, kindergarten, and much more expenses that arise during the month. Parents can fulfill their wishes when they have enough money left when they pay all the necessary fees, then they can fulfill some wishes of their children.
There are several options for instilling good financial foundations in children, some of them are giving children a credit card, job lessons, giving an allowance, saving for a higher goal, starting their own business, teaching them to invest, and making them a vision board.
- Get them a kid’s credit card
You may find it inconceivable that your children have this type of card, but this is one of the best ways that currently exists. You may be asking why? Because this type of card contains all kinds of financial models from saving money, investing in stocks, spending, earning, and donating to the needy. In addition to containing all these segments, there is the innovation of the activity tables, which are modeled in such a way that each one is adaptable to each age of the child. Children learn how to perform tasks within given time limits, such as household chores, and curricular and extracurricular activities. Along with their commitment and effort, they will be able to increase their allowance and earn extra money.
The procedure for opening a card
The procedure for opening a card is uncompleted: a parent or guardian provides the children’s personal information and connects their account with theirs. The account is activated by depositing money, and boom the account can be used immediately.
What’s great about this type of card is that parents and children have everything in one place and complete insight into the transactions that the children perform.
- The importance of savings
One of the most important things is to instill in children the habit of saving for a higher goal. When it comes to saving, children must have their own goal for saving money, because that way they will be more motivated to keep saving. Many children save for college, a special course, to buy a car, a trip to Europe, a phone, a computer, or something else.
- Encourage them to become entrepreneurs
Children learn best when they earn money themselves, then they behave completely differently. If the children want, they can find a part-time job to earn extra money for their expenses. Depending on the child’s age, children can do various jobs, take care of the neighbors’ dogs, look after pets when the neighbors are away, have a lemonade stand, take care of the garden, mow the grass, shovel snow, tutor someone in a specific subject and babysit.
- Teach them how to invest
Children within the children’s card option can invest in various shares of well-known companies and brands such as Nike, Adidas, and Google. It is very important that you teach them the basics of investing and that they do not focus only on one branch of the industry, but that they expand their investments over time to different industries to enrich their portfolio.
- Don’t bail them out when they make a mistake
We all learn best from our own mistakes, and so do children. It is crucial not to rescue children when they make a mistake. Children must take responsibility for their actions and get themselves out of the problem they are in. Don’t worry, children can think outside the box to find solutions, you can advise them as a parent but not help them financially.
Iskra Banović is our seasoned Editor-in-Chief at BlueFashion. She has been steering the website's content and editorial direction since 2013. With a rich background in fashion design, Iskra's expertise spans across fashion, interior design, beauty, lifestyle, travel, and culture.