May 13, 2008

Financial Education For Kids

Yesterday I read an article about “Financial Education for Children’ in one of a local business newspaper, Kontan Weekly. It’s a simple guide for parents. I, myself, really concerned about how important it is for young children to understand the value of money in this era of credit cards and ATM.
I believe the importance in giving them financial “training”. The earlier we gave them the better result they’ve got and in the long run would save difficulties for them in managing their own money.

These are the steps to start:
Parents as a role model.
Did you remember how was your parents managed their money when you were kid? Then take a look at their financial condition now. However they are our first role model in forming our way of thinking about money. Maybe you would follow your successful parents in managing money or vice versa. For me, I really turn to the different 'direction' from them since I don’t want to follow their mistaken.
From the beginning of this year I’ve started to share with my 2 teens about our financial condition. It doesn’t matter for them to know it since they’ll learn something. My hubby and I feel free to discuss with them where we want to invest our money and why we did it or for what reason we’d spent the money into this or that…

Stop to save money in piggy bank. Teach them how to spent money.
That’s true. Piggy bank would not give financial education to your kids. It only teaches your kid to put in the coin or $$ into a narrow space. Kids should understand money is a legal payment device. It means money should have to be spent :). Kids should understand shopping is necessary, but it doesn’t healthy if we did it to much!
With my family -at the end of the kids’ school year- we usually go for traveling and at that moment they could spend their saving money (often it comes from their all year long extra ‘snack’ money that we gave them weekly and from our “rewarding” present if they did something good and special). But still spending in a moderately way.

Teach them how to earn money
For you that already have kids, surely we had ever got these questions:
“Mom, if you don’t have enough money why shouldn’t you go and get some money from that ATM booth?” or “You could scratch your card, isn’t that easy Dad?”.
You need to tell them money comes from hard works and we save it in a bank. ATM or credit cards just a kind of card to access the money we’d saved before. (for a 3 – 5 aged kid usually need a longer time to make them understand). I often show to my kids when I need to transfer some money for paying bills at the ATM.
So, there is no ‘money tree’, honey. But you know what, once my 4 year old kid saw an Angpao Tree and asked me a question when we were shopping at the mall around Chinese New Year, “Mom, there is a real money tree here. You said it doesn’t exist”. Ha ha …
Sometimes learning to start a ‘little business’ could be fun for teens. I’ve ever posted to this blog about my daughter sold her own made name cards and how my 2nd boy often run out of money. Last week he made a good progress and we’re happy for him. This the ‘story’ goes….
Last week end we all go to Makro -a wholesaler place- to do monthly shopping for home supplies. The he saw a pack of eraser -contain 40 ones- for only Rp 8.000,- (about less than 1U$). “How cheap”, I said, but does it good?
“May I have it, mom?” he asked for permission. I’ll agree. At home he tried the eraser and said it was a real good quality.
The next day after he arrived from school, he gave back my Rp 8.000 because he had sold them to his friends for Rp 1.000 each. He sold out 37 pieces; keep the 3 pieces rest for him and 2 of his siblings. Gosh…he gained Rp 29.000 !
Sure he was glad and spent part of the money for an action figure of a Japanese comic hero. It was his first ‘selling’.

Well, the financial education never comes to the ending. All the good habit should start from the very young at ages. Also don’t forget to remind them about the habit of giving and sharing to the needy. Good luck!


E-phi said...

I just don't like if kids are doing something with Credit Card as an easy buy. I am a conventional person,so I prefer to have the piggy bank for learning.

henny said...

Yes, credit cards and other 'magical' cards should be owned by those whose basic financial education are good enough.