Financial Literacy for children and teenagers.

We are living in a cashless world, as seen by the rise of contactless payments and e-commerce. When it comes to living in?a cashless society, children and young people are a particularly vulnerable population. Children benefit from experiencing?scenarios in which tangible money is traded. As a result, without physical cash, young people comprehend the value of?money less than they could previously, exposing them to the danger of debt cycles and falling prey to fraud. We must help?young people have a healthy relationship with money and contribute to our economy.

Financial literacy is the ability to understand and apply financial skills, such as personal finance management, budgeting,?and investing. Depending on how old your child is, there are some ways you can introduce healthy financial habits that they?will carry for their entire lives.

3 – 6 Years Old

1. Use a transparent jar to save - A piggy bank at any age is a great idea, and the beauty of it is it can be any container. Using a clear container to save will give your toddlers a clear picture of the money growing. Talk to them through it and make a big deal about how there is more money each time they make a deposit.

2. Lead by example - Money habits, like any other, are developed in childhood. Keep in mind that young eyes are observing you. They will notice if you use your bank card every time you go out. They will notice if you and your spouse are fighting over money. Set a good example for them, and they will be far more inclined to follow it when they are older.

3. Demonstrate to them the system of paying for goods and services - You must do more than simply state that stuff costs money. Further assist them by letting them?take?a few dollars from their jar, carrying it to the store, and personally handing the money to the cashier.

7 – 12 Years Old

1. Show opportunity cost - That is another way of stating, "If you buy this video game, you will not have enough?money to buy that pair of shoes." At this age, your children should be able to weigh options and grasp the?consequences.

2. Avoid impulsive purchases - This age group understands how to capitalise on impulse buying, especially when it is?done with someone else's money, throwing tantrums if they have to. Instead of giving in, tell your youngster that?they may use their hard-earned commission to pay for it. However, advise your youngster to wait at least a day?before purchasing anything above $15. It will most likely still be there tomorrow, and they will be able to make that?financial decision with a clear head the following day.

3. Stress the importance of giving - When kids start earning a little money from household chores, teach them about?donating. They can choose a church, charity, or even a friend who requires assistance. They will eventually realise?that giving affects not just the individuals to whom they gift, but also the donor.

In the next issue, we will cover financial literacy for teenagers!

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