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!

Talk About Money

Hi! Recently something 'flash' in my mind ... "money" and "kid" and I remember that I forgot to give my kids some money this morning before they went to school.

Oh yes, I always give my 2 kids -each Rp 35.000,- , it's about U$ 3.80- in the beginning of the week (this rule, I mean the amount of the money, is valid from this January). Since there are 7 schooldays in a week here, so it means they get from me Rp 5000,-/day. I only give them once, if they broke in the middle of the week.. it would become their 'problem', I wouldn't give them an 'extra income'. If they're smart enough, they could have much money left in the weekend. They could buy anything they want from it.

I used to do this since they were at 4th grade, because I want them to learn about value of the money, discipline, responsibility and understand about simple cash flow. So far..I think it's useful. It's useful for me, too, since not every morning
I could prepare their meal-boxes for school. Sometimes the appetite of the 3 kids is different, like this...when I've got lazy enough (it's natural..ha-ha-ha), I could give Ian-aged 4- only for example 2 small boxes of cereal with milk or biscuits or anything I could buy from nearby store, but not for the 2 older kids. They don't want that kind of food anymore for school, so "you could buy your 'real' meal from the school canteen, honey", I said.

This goes for Dea, my first daughter-aged almost 13- :
Frequently she could still have up to Rp 10.000,- to buy her favorite Japanese manga comic in the weekend. She told me once, she could only expensed her money max Rp 5000,-/day, but only for 4 days. She would take meal from home for the rest of 2 more day. Sometimes she could have more than Rp 10.000,- in the weekend. I remember, when she was at 5th grade, she has once sold name cards that she designed and print from our PC to her friends. Actually my husband and I were surprised of her genuine idea. The profit is quite good, but I found she forgot to add the expenses for the ink to print (it means she used my ink!). I was glad this kind of situation could emerged her business idea. I believe she will learn much from this 'lunch money rule'.
I saw she has more discipline and responsibility than her brother in spending money.

About my 2nd kid, Adit -aged 11- :
Sometimes when I see my middle son has a hard time to manage his lunch money that we gave him each week, I smile and said inwardly, "Poor Adit." He sometimes can make it and have some left but most of the time he broke and can not make it until the end of the week.
But there is nothing we can do to help because he needs to learn about that.

From the article I read, parents should give basic financial education to their children if they want their children "smart" in managing their own money when they're grown up.
Well, let's see...