Financial education is crucial for children as it provides them with the tools and
knowledge necessary to make informed decisions about their money in the future.
Let's review what we studied in school
as children: the year of some king's or military leader's conquest in the 16th
century, Latin, the periodic table of chemical elements, and so on.
I am a firm believer that knowledge
doesn't take up space and that it's wonderful to know a little bit about
everything, even if it's just to answer questions on TV quiz shows. In more
"modern" schools, they even teach children to cook or iron as
something useful for their lives.
But how many schools do we know that
teach children what compound interest is?, how a savings account works vs a
current account?, the difference between a debit card and a credit card, or how
a loan is amortized? Sooner or later, we are all, absolutely all, going to have
to know and use these products.
Teaching children about the value of
money, how to save, spend responsibly, and invest can help them develop healthy
financial habits that will benefit them throughout their lives.
The
Importance of Financial Education for Children
In today's fast-paced world, equipping
children with the knowledge and skills to manage their finances is more
important than ever. Financial education for children lays the foundation for a
lifetime of sound financial decisions and stability.
Here are several reasons why teaching
kids about money is crucial:
1. Developing
Healthy Financial Habits: Financial
education helps children understand the value of money and the importance of
saving. By learning how to budget and manage their finances early on, children
can develop habits that lead to financial stability and success in adulthood.
2. Promoting
Responsible Spending:
Teaching kids about the consequences of their spending choices encourages them
to think critically before making purchases. This awareness helps prevent
impulse buying and promotes thoughtful decision-making.
3. Understanding
the Power of Investing:
Introducing children to the basics of investing can spark an interest in
growing their money. Understanding how investments work and the potential
benefits of compound interest can inspire them to start investing early,
setting the stage for financial growth over time.
4. Building
Financial Confidence:
Knowledge is power. When children are educated about financial matters, they
gain the confidence to handle their finances independently. This confidence is
crucial as they transition into adulthood and face financial decisions on their
own.
5. Preparing for
Future Challenges: Life is
full of financial challenges, from unexpected expenses to major life events
like buying a house or starting a family. Early financial education equips
children with the tools to navigate these challenges successfully.
6. Encouraging
Goal Setting: Financial education
teaches children the importance of setting and working towards financial goals.
Whether it's saving for a new toy or planning for college, goal setting helps
children learn the value of planning and perseverance.
In conclusion, financial education is
not just about teaching children to save money; it's about empowering them with
the knowledge and skills to make informed financial decisions throughout their
lives. By investing in their financial education today, we can help ensure a
future generation of financially responsible and savvy individuals.
But, How should be the Financial
Education to Children?
Teaching financial education to children
is essential for preparing them for the future. Here are some strategies and
methods that could be effective for imparting this knowledge:
1. Early and Continuous Integration
·
Early Age: Introduce basic concepts from a young age, such as
the value of money, through games and practical activities.
·
Gradual Progression: As children grow, the topics can become more
complex, covering everything from saving to investing and credit.
2. Practical and Real-Life Methods
·
Games and Simulations: Use board games like Monopoly or online simulators
that teach financial concepts in a fun way.
·
School Projects: Assign projects where children manage a fictional
budget to organize an event or run a small school store.
3. Experience-Based Education
·
Visits to Banks and Businesses: Organize educational visits to banks, companies, and
markets so children can see how finances work in the real world.
·
Guest Speakers: Invite financial professionals to give talks and
answer questions.
4. Use of Technology
·
Educational Apps: Utilize apps and platforms that teach personal
finance interactively.
·
Online Resources: Take advantage of educational videos and tutorials
available on the internet.
5. Lessons at Home
·
Involving Parents: Encourage parents to talk about money at home and
involve children in family budget planning.
·
Allowances and Saving: Give allowances and teach children to divide their
money into saving, spending, and donations.
6. Formal School Curriculum
·
Specific Subjects: Include financial education courses in the school
curriculum, adapted to each educational level.
·
Interdisciplinary Approach: Integrate financial topics into other subjects such
as mathematics, history, and social studies.
7. Teaching Values and Responsibility
·
Financial Ethics: Instill values such as honesty, responsibility, and
the importance of making ethical financial decisions.
·
Consequences of Decisions: Show real-life examples of the positive and negative
consequences of financial decisions.
Lesson Plan Example:
Primary Level
Topic: Introduction to Money
·
Objective: Students will understand what money is and how it is
used.
·
Activities:
·
History of Money: Brief talk about the evolution of money from
bartering to coins and bills.
·
Store Game: Create a store in the classroom where children can
buy and sell products using play money.
Secondary Level
Topic: Basic Concepts of Saving and Investing
·
Objective: Students will understand the importance of saving
and the basic principles of investing.
·
Activities:
·
Savings Plan: Students will create a savings plan for a specific
goal.
·
Investment Simulation: Use an online simulation for students to invest in
fictional stocks and see how the market fluctuates.
In summary, financial education should be comprehensive, practical, and
adapted to the age and comprehension level of the children. Involving the
family, using technology, and making learning interactive and relevant are key
to helping children acquire financial skills that will be useful throughout
their lives.
Here are some recommended Books that
can help you learn how to teach financial education to children:
1. "The Opposite of Spoiled: Raising Kids Who Are Grounded,
Generous, and Smart About Money" by Ron Lieber
·
Overview: This book offers practical advice on how to talk to children about
money, covering topics like allowance, chores, and giving. Lieber emphasizes
the importance of teaching children values such as patience, generosity, and
perseverance through financial lessons.
·
Key Points: Allowance strategies, charitable giving, saving vs. spending, and
discussing the value of money in age-appropriate ways.
2. "Smart Money Smart Kids: Raising the Next Generation to Win
with Money" by Dave Ramsey and Rachel Cruze
·
Overview: Written by financial expert Dave Ramsey and his daughter Rachel Cruze,
this book provides insights into raising financially savvy children. It
combines Ramsey's proven financial principles with practical tips on teaching
kids about money.
·
Key Points: Teaching kids to work and earn money, the importance of giving,
saving, and spending wisely, and how to set financial goals.
3. "Make Your Kid A Money Genius (Even If You're Not): A
Parents' Guide for Kids 3 to 23" by Beth Kobliner
·
Overview: This book offers age-specific advice on teaching kids about money,
from toddlers to young adults. Kobliner breaks down complex financial concepts
into simple lessons that parents can easily convey to their children.
·
Key Points: Age-appropriate financial education, practical tips for everyday money
management, and preparing teens and young adults for financial independence.
4. "Raising Financially Fit Kids" by Joline Godfrey
·
Overview: Godfrey's book focuses on building financial literacy in children
through various stages of their development. It provides a framework for
parents to instill good money habits and financial responsibility.
·
Key Points: Financial education by developmental stages, practical exercises, and
activities to teach budgeting, saving, and investing.
5. "Money Savvy Kids: Parenting Essentials to Raise Money Smart
Children" by J. Raymond Albrektson
·
Overview: This book offers strategies for teaching kids about money management,
including earning, saving, and spending. Albrektson provides practical tools
and resources to help parents guide their children's financial education.
·
Key Points: Techniques for teaching financial responsibility, the importance of
goal-setting, and fostering a positive money mindset.
6. "The Everything Kids' Money Book: Earn it, save it, and watch
it grow!" by Brette Sember
·
Overview: This interactive book is designed for children themselves, with fun
activities and lessons about earning, saving, investing, and spending money.
It’s a great resource for parents and teachers to use with kids.
·
Key Points: Engaging activities, kid-friendly explanations of financial concepts,
and tips for practical money management.
7. "Financial Peace Junior Kit" by Dave Ramsey
·
Overview: This kit includes a book and additional resources aimed at children,
teaching them the basics of money management through activities and practical
lessons. It’s designed to make learning about money fun and interactive.
·
Key Points: Interactive learning tools, hands-on activities, and a focus on
earning, saving, and giving.
These books provide a variety of
approaches and techniques to help you effectively teach financial education to
children, whether you are a parent, teacher, or guardian.
If we prefer Online Programs or Games, there
are several online programs and games designed to teach children about
financial literacy in an engaging and interactive way. Here are some notable
options:
Online Programs and Platforms
1.
Khan
Academy
·
Overview: Khan Academy offers a variety of free courses, including a section on
personal finance. Their content is designed for different age groups and covers
fundamental concepts such as saving, budgeting, and investing.
·
Website: Khan Academy Personal Finance
2.
Practical
Money Skills by Visa
·
Overview: This website offers a wealth of resources, including games, lesson
plans, and activities designed to teach financial literacy to children of all
ages.
·
Website: Practical Money Skills
3.
Jump$tart
Coalition
·
Overview: Jump$tart provides resources and tools for educators and parents to
teach financial literacy. They offer a clearinghouse of high-quality financial
education materials.
·
Website: Jump$tart Coalition
4.
Money
Savvy Generation
·
Overview: This program offers curricula and products aimed at teaching financial
literacy to children, including their popular Money Savvy Pig, a piggy bank
designed to teach kids about saving, spending, donating, and investing.
·
Website: Money Savvy Generation
Online Games and Apps
1.
Bankaroo
·
Overview: Bankaroo is a virtual bank for kids, created by kids. It teaches basic
financial concepts like saving, budgeting, and goal-setting through a virtual
banking experience.
·
Website: Bankaroo
2.
PiggyBot
·
Overview: PiggyBot is a virtual allowance and money management app that helps
kids track their saving, spending, and sharing. It’s designed to make learning
about money fun and interactive.
·
Website: PiggyBot
3.
Renegade
Buggies
·
Overview: This mobile game, developed by the National Center for Families
Learning (NCFL), teaches kids about smart shopping and budgeting through an
exciting racing game.
·
Website: Renegade Buggies
4.
Savings
Spree
·
Overview: This award-winning app teaches kids how daily spending decisions can
impact their savings over time. It’s presented as a game show, making the
learning process engaging and fun.
·
Website: Savings
Spree
5.
Financial
Football
·
Overview: Sponsored by Visa, Financial Football is a fast-paced, interactive
game that engages students while teaching them money management skills. The
game is available for different age groups and is designed to be both
educational and entertaining.
·
Website: Financial
Football
6.
Investopedia
Simulator
·
Overview: While more suited for older kids and teens, this stock market
simulator allows users to practice trading stocks with virtual money, helping
them understand the basics of investing.
·
Website:
Investopedia Simulator
These programs and games provide a variety
of approaches to financial education, making it easier and more enjoyable for
children to learn important money management skills.
I hope this post helps many adults and
not-so-adults to reflect that if schools continue to decide not to teach our
children about financial literacy, it will be our responsibility to provide
this knowledge to our children and ensure they start as early as possible to
understand and have discernment in concepts such as the use of money, savings,
expenses, income, interest, loans, and much more.
Start as soon as possible and try to
make it as entertaining as possible; let's not turn something so important into
just another numbers subject. For that, the math teacher will already be in
charge with trigonometry, differential integrals, and natural logarithms...