Being a financial literate is not limited to adults alone as the children also need this knowledge in the early stages of their lives. Am sure the question that comes to mind is; these children do not make money yet, so why do they need this knowledge?
question above, it is true that the children do not make money yet, but this is
an investment in knowledge and believe it or not, it pays the best interest.
Financial education is about ensuring our children is educated on how best to
manage finances, which is a way of securing their future right from the very
moment the knowledge is impacted.
What is the importance of this knowledge?
- It helps in realizing the need for saving: The need for saving is underrated in the lives of our teenagers especially those within the age 16-25, and this will be due to the fact that they were not enlightened on financial education early enough. As parents, we should try to encourage our children to save as savings is a powerful weapon for preparation against an unforeseen future.
- Budgeting skills: Financial education helps in reducing spontaneous spending to a minimum level and making plans for money spent and money received. This is a trait that can be hard to develop if not started at an early age and since financial education is a life skill that is not taught in school, it will be a plus for our children to learn this from us parents.
- It gives our children the ability to make rational decisions: Hazy decisions might be made by individuals who do not have financial discipline, and since impacting the knowledge of financial education means teaching our children how to be financially disciplined, our children will grow up knowing that financial decisions should be made rationally.Rational decisions may include the identifying the wants from the needs and knowing that needs are the immediate demands and wants can be bought at a more convenient time.
in which parents can teach the children how to be financially literate
It is well known that the children imitate their parents and with this knowledge, we parents should try to set an example that will portray what we preach. Imparting knowledge cannot just be done by word of mouth. What differentiates a footballer from a football analyst is the fact that the footballer is playing on the field. Therefore, instead of just telling the children how to be financially disciplined, as parents, it is best we show them from our act.