When can I start teaching my kids about money? Do I wait until they are taught in school? Do I bring up the conversation when they first get pocket money?
Like many aspects of parenting, there are no hard and fast rules to raising your kids. However, research from the University of Cambridge explains that money habits are set by the age of seven.
In a world dominated by financial complexities, the importance of instilling money-savvy habits in your children early enough cannot be overemphasized, especially in Nigeria where only 26% of the adult population is financially literate.
Providing your children with comprehensive financial intelligence training not only shields them from significant money errors as they mature but also equips them to effectively handle the wealth you’ve built.
Here are five building blocks to help you raise financially aware kids.
- Teach Them The Basics of Money
The first step to raising financially aware kids is to teach them the fundamental concepts of money – earning, saving, and spending – in a language that resonates with young minds.
Break down money to the tiniest bit, and share anecdotes and practical tips for making learning about money fun and engaging.
Gently ease them into the essentials of financial education and discuss basic concepts like budgeting, saving, and delayed gratification with them.
- Make Financial Activities Fun and Interactive
Turn financial education into an adventure with fun and engaging activities your kids would love.
From setting savings goals, playing money-related games and fun money challenges to creating a DIY superhero-themed budget, make financial education enjoyable.
Provide age-appropriate financial games and watch your kids learn about money easily.
- Teach Them The Art Of Making Money
Teach kids how to make money? Of course! Contrary to what some parents think, kids are not too young to take on certain responsibilities.
Rather than hand them pocket money, why not make it more fun by making them earn it? Give them tasks and chores to do for you or others to get paid.
Understanding how to make money will open up their minds, teach them how to budget and help them to make better financial decisions in the future.
- Help Them Understand The Difference Between What They Need And What They Want
It is important to help your kids develop an understanding of the difference between ‘luxuries’ and ‘necessities’ early in life.
Does your child know how to account for how much they should spend every day? Do they know the things they need? Do they know the things that can wait until later?
Start conversations about needs vs wants when you are out shopping to help them gain a greater understanding of saving and spending. Work with them to understand how to plan their spending and how much they should be saving.
- Work With Them To Build A Savings Plan Early
It’s not uncommon for kids to want to spend it all when they get any money. However, it is important to teach them to set aside some money no matter how little.
You’ve explained the benefits of structured saving, goal-setting, and the power of compounding interest to them, now it’s time to show them!
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