Traditionally, financial literacy is rarely taught in mathematics lessons. Instead, activities such as learning equations or theorems, like Pythagoras and trigonometry, are much more common. But how useful are these lessons and how often do we apply them to everyday life?
There have been numerous calls to action for governments across the world to integrate better financial education into school’s curriculum. It’s hoped that this would encompass a whole range of topics, such as personal finance management, budgeting and investing.
What’s more, there is a growing desire to offer education law advice for parents who are particularly interested in teaching their children about the importance of money. To learn more about financial literacy, and why it might be smart to bring it into the curriculum, read on…
What is Financial Literacy?
According to Investopedia, financial literacy is ‘the confluence of financial, credit, and debt management knowledge that is necessary to make financially responsible decisions.’
When you’re financially literate, you understand how to manage your money and allocate your income accordingly, often in the form of savings, to avoid financial debt. You’ll have the knowledge to make educated decisions on your finances and eventually be able to evaluate investment opportunities.
As children, these life lessons can start at a young age without them even knowing. Exercises such as giving children a weekly allowance and allowing them to either put it in a piggy bank or spend it on an item of their choice teaches individuals from a young age to evaluate their options and make financial decisions.
Why is it Good to Teach Financial Literacy to Children?
Teaching kids’ financial literacy from a young age comes with a variety of benefits, including:
• Your children will understand the value of money and begin to demand less. Explaining the cost of items to children will help them slowly gauge what is and isn’t expensive in society.
• Once they start to understand the value of things, they’ll become much more appreciative when they are gifted a present or given something unexpectedly.
• By being taught about financial risks, children will be better versed to avoid financial debt and bankruptcy in the future.
• They may be more inclined to plan for events in the future, such as saving for a holiday, investing in property, or even putting money aside for retirement.
• They will lead happier more stress-free lives – this benefit is one that is often forgotten about, but should be heavily emphasized when considering the long-term consequences of teaching financial literacy.
How Can I Talk to my Children’s School About Financial Literacy Lessons?
Don’t be afraid to talk to your children’s school about incorporating financial literacy into their lesson plans. Although each country has its own set curriculum, there’s often wiggle room for teachers to be creative.
Ask to arrange a meeting with your child’s teacher or headteacher to talk about after school classes or incorporating certain tasks into their homework. The more ideas you bring to the table, the more likely the teachers are to take your feedback onboard.
Teaching children about financial literacy in the classroom is one thing but try to encourage schools to put their teaching into practice. For instance, with permission from a parent and help from a teacher, children could set up a new bank account or manage a school budget for an upcoming play or sports project.
Finally, make sure to add your signature to petitions and sign up to newsletters from organizations such as Council for Economic Education, Jump Start and Junior Achievement.
How Can I Teach Financial Literacy at Home?
As previously discussed, the smallest exercises, such as rewarding children with pocket money for good deeds, can teach your child a lot about financial responsibility. Here are some ideas for blending this into your home life…
Encourage your child to get a part-time job
Encourage your children to get a part-time job so they’ll not only value their money but also the time it takes to earn it. If they’re too young to start legally working, offer a money incentive for chores such as washing the car or hoovering the house.
If they borrow money, they must repay it
By enforcing this rule, you are showing your children that nothing in life is free (unless it’s a birthday present). Depending on the age of your child, you could even bring interest rates into it. For instance, for every day your child owes you a £1, they owe you another 10p.
Gift them financial games and literature
Why does learning about finances have to be boring? Games like Monopoly, Cashflow and Peter Pig’s Money counter can yield important lessons about identifying opportunities, counting money, and saving for investment. Books like ‘If You Made a Million’ and ‘How to Turn $100 into $1000000’ are aimed at kids and are really popular.
Talk to your children about financial difficulties
Having an open and honest conversation with your children about the struggles of managing finances, is brave but beneficial. By talking about your own experiences with money, you’ll be able to guide your children in the right direction and they’ll feel they can approach you for advice.
Ready to Start Learning About Financial Literacy?
So, there you have it! By now, you’ve probably formed a stronger opinion on whether financial literacy should play a larger role in your children’s education.
Remember, every child must start somewhere, and there’s plenty of professional advice out there if you’re finding it particularly hard to reason with your kids. By making it fun, and providing incentives, you can teach this important life lesson without even trying.
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