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Financial Education

Children and the financial world

Financial Education is one of the lessons that every child will apply in their adult life, regardless of the path they follow. Knowledge on this subject goes far beyond spending less than you earn. It is first and foremost the ability to plan and execute plans.

It is important that children are taught how to manage their own money from an early age. After all, it's really worth updating the saying to “It's small that you invest in children”. Recommendations for introducing money into children's lives depend on age.

The best way to teach them how to manage their money should be through a Financial education, which should be introduced into children's lives as part of family education. That is, with parents as guides and promoters of economic awareness of the little ones.

To help you in the role of educators, in this chapter we brought the theme “Children and the financial world”, alluding to the month of June, with the aim of contributing so that the little ones have enough information for the conscientious use of money.
Children and the financial world
Financial Education should be included in children's routine from an early age, after all, the sooner they learn the price and value of each thing, the better their money management will be in the future. The contact with this theme makes the child more critical about money, sharpens the awareness of the importance of saving what positively influences their life, since financial independence is a desire of most people.
 
The act of paying bills on time, getting projects off the ground, investing and still having a reserve for emergencies is what everyone craves as the ideal financial scenario. Currently, marketing and advertising actions have been responsible for the increase in consumption, which is often superfluous, and they hold a sweeping force over people, imposing products and inducing actions and behavior. In this sphere, children are most often heavily influenced by advertising and if they do not have clear information on the subject, they can be easily deceived. This causes a false sense that the parents have the financial capacity to buy everything for them, since they do not have the proper clarification on the importance and origin of money.
 
Due to the relevance of the theme of preventing the consumption of superfluous goods and risky behavior from childhood, when it comes to money, it is essential that financial education be placed on the agenda from an early age. 
Why invest in financial education still in childhood?
It is very important that parents are aware that this type of knowledge can contribute to children becoming more aware adults about money, because they understand the importance of financial planning, to avoid unnecessary expenses and unnecessary indebtedness. 
 
Financial education is a way to create bases for a healthy relationship with money, that is, the act of teaching how to earn, save and spend money.
 
The learning by children and young people of issues related to money and personal finance and the consequent development of technical and behavioral skills, contributes to an enlightened action in the present and cautious in the future. The children of today will be the adults of tomorrow and, therefore, it is extremely important that they are holders of knowledge that will lead them, in the future, to be more conscious consumers.
 
Money and associated themes are present in countless day-to-day activities, so it can be a good opportunity for parents to talk to their children about the importance of money management, setting a concrete example and involving them in family decisions. In this way, the child will have an understanding of how essential money is in our lives, what it is for and where it comes from.

It is essential to understand that does not exist best way to make money in that through work.

With so much information, you might be thinking: How to start introducing Financial Education to my child?

Here are some tips that can be the way to start a conversation with your children about the subject:
Tips
  • Give allowance or allowance
Allocating allowances  to children and young people, of a variable amount depending on the parents' monetary possibility and the children's age, gives them responsibilities in their own consumption decisions. This alerts them to the importance of saving, as they will have to be selective between consuming one product at the expense of others, and being careful with timing.
  • Show in practice the importance of collecting, saving and investing 
Saving is the first step for those who want to start investing and it is advisable to start in childhood. If the child has collected the money he has earned throughout the month, and spent it all at once, it is time to explain to him the importance of saving and having financial reserve.
Understanding that money that is kept in the right place can pay off, encourages the child to save and have long-term goals. (Link Caixa Savings Solutions for Children and Youth).
 
If I know how to wait, I can save money to buy what I want in the future.
  • Encourages you to learn from your own bad financial decisions
Let your child learn from their own bad financial decisions. Bought a branded sneaker and ran out of money to pay for the school lunch?! And now? Make him reflect on his decision and deal with the consequences. Be firm in your desire to be protective and "put your hand over his head." The lessons we learn from mistakes are often more memorable than those from successes. So, yes, let your child get it wrong.
 
We hope that after reading this chapter, your vision of the financial world in the context of children has gained new horizons. After all, raising children is a daily challenge. Good luck with your financial lessons!
 
 
 
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