Welcome to the Tuesday Toots!

This newsletter is about the crucial need to impart financial literacy to children and equip them with money management skills from an early age.

By making the children financial literate, parents can ensure their future success, enabling them to make informed financial decisions and avoid debt traps.

How can parents effectively teach children about managing money and instil financial literacy?

Let’s explore how parents can nurture financial literacy in children, setting them on a path toward a secure financial future.

“Money moves from those who do not manage it to those who do.”

– Dave Ramsey

Why is financial literacy vital for children?

Money is one subject parent are uncomfortable discussing with their children. And that means children often have no idea about managing their own finances as they grow up. Financial literacy means teaching them about the value of money, about managing small amounts like their allowances and encouraging good healthy financial habits.

It’s imperative that children be taught these lessons at home so that they are aware of the nuances of handling their finances.

Schools do not include such subjects in their curriculums, making them a theoretical and academic topics with no real life connection.

Before you realise it, it will be time for the children to go to college. They’ve to manage their expenses by themselves. But how are they going to do it when they haven’t learnt anything at home?

Have you taught them the basics like savings, budgeting, planning, accounting?

By teaching them about handling money, you’re encouraging a high level of thinking, explaining the value of money, developing their self-esteem, and preparing them for their adult life.

What’s to be done?

It’s not as difficult as you think. Money is something you use in your day-to-day life. So, introduce them to the different currencies and denominations early on. It teaches them to identify them and attaching a value to them.

Allow them to handle small amounts (of course under your supervision).

By being able to handle money from an early age, it removes the fear of managing it as they grow up. It’s no longer overwhelming when they get their allowance. This gives them the confidence to handle it with more sense and understanding.

Once they understand the value of money, it teaches them to plan and spend responsibly without getting swayed by its power. It develops a high level of analytical thinking as the child grows up.

Empowering actions for parents

Parents must encourage children to set up goals. Like what they want to do with the money they have saved.

They must engage the children in money related activities, like involving them during grocery shopping.

They must encourage participation in family spending decisions, something as simple as what gifts to get for birthdays. These simple actions give them the confidence to understand the finer points of the transactions.

Don’t make the money talk a boring lecture or something very serious. That will make the whole subject of money and finance avoidable. Instead include it in the day-to-day routines, making it less overwhelming and more approachable.

Children will learn about financial responsibility through live examples. This is the best way to let them grow into mindful spenders and responsible earners.

What are the long-term benefits?

Financial literacy is often ignored as its bad manners to talk about money. But if we want our children to understand money and how it works, its best to start off early. It’s not just about money management but more about shaping responsible individuals who are able to create a secure financial future for themselves.

From developing a high level of thinking, making them thoughtful spenders and investors, teaching them about money management skills also helps them to be ready to understand the complex financial world successfully.

It has become a lot easier now to learn the intricacies of the finance ecosystem with the large number of resources available online. But comprehending the fundamentals can become less stressful if the child is exposed to them at a young age.

Conclusion

The core points of this newsletter are –

– Instilling the value of money in the children at an early age is important.

– Encourage children to actively participate in financial decision making.

– Fostering a positive attitude towards responsible spending.

To ensure a future where the children are confident of managing their finances effortlessly and successfully is something all parents desire. This is an achievable aspiration.

All it needs is for the parents to prepare the foundations with proper money management lessons from an early age.

There’s no point ignoring what’s going to be a very important and pivotal part of their adult life, something which will impact their confidence and self-worth.

Need your opinion –

All this talk about teaching children about managing their finances is not just talk. I plan to have a email course next month teaching parents how to go about this process in simple steps.

What do you think – should I or shouldn’t I? Let me know so I can finalise the plan for a concise and comprehensive email course with required resources.

Or do you have some other areas in mind that need focus? Feel free to share.

Interesting articles I read

What is lucid dreaming – and how can you learn to do it? – And I was thinking I’ve got some form of insomnia! This article was an eye-opener (no pun intended).

Ulta-processed food isn’t just bad for your health-it messes with your mind – What we assumed to be comfort food are actually playing havoc with our cognitive faculties. Read this before you reach for your next burger or fries.

Books by my bedside

Have started re-reading Sapiens: A Brief History of Mankind by Yuval Noah Harari. Love that book. Had read a long time ago. Felt like revisiting some of the passages.