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The first basic personal finance education I learned as a child was saving money in a locally made pot. Well in very modern days now we call it piggy banks. I was interested in selling things too. So I learned it and on very long holidays I would sell some things and buy something for myself before school started. My parents allowed me and I was happy doing it. I ate most of what I sold but I did sell a good amount.
What age should children start having a personal finance education?
If you are wondering at what age I was selling things I wasn’t more than six years old at that time. However, I was excited about exchanging money for goods and buying something for myself. Hence, if you are to ask what age is right for financial literacy for children the answer is any age. As soon as they can start adding up 5+5 or making demands for money to get what they want.
10 Basic personal finance education for children
- Budgeting: Teach children the importance of creating a budget to plan and track their spending, distinguishing between needs and wants.
- Saving: Encourage children to save money regularly, emphasizing the benefits of saving for short-term goals (like buying a toy) and long-term goals (like college or retirement).
- Earning Money: Teach children about different ways to earn money, such as through chores, allowances, or part-time jobs, and the importance of working for what they want.
- Spending Wisely: Help children understand how to make informed spending decisions, compare prices, prioritize purchases, and avoid impulse buys.
- Understanding Interest: Introduce the concept of interest, explaining how it works with savings accounts and loans, and how saving early can lead to compound interest growth over time.
- Setting Financial Goals: Guide children in setting achievable financial goals, such as saving a certain amount of money, buying a desired item, or donating to charity.
- Delayed Gratification: Teach children the value of delaying gratification by saving for bigger purchases instead of always seeking immediate rewards.
- Giving Back: Instill the importance of giving back to others through charitable donations or volunteering, fostering empathy and generosity.
- Understanding Debt: Introduce the concept of debt and its potential consequences, emphasizing responsible borrowing practices and the importance of paying off debts on time.
- Financial Responsibility: Teach children about financial responsibility, including the importance of honesty, integrity, and accountability in managing money.
By learning these fundamental concepts early on, children can develop healthy financial habits and attitudes that will serve them well throughout their lives.
