Having a child is perhaps one of the greatest gifts God has given to mankind and is a natural example of how limitless love should be.
For a parent, one of the best ways to shower your children with love is to provide them with quality education. However, education can come in multiple forms. There is academic education, religious education and even moral education.
But one form of education endears me and stands out as perhaps the best that you can grant a child. That education is financial literacy. Despite the opportunities academic education can provide, financial literacy and to a larger extent investor education is perhaps the most important.
However, these are not thought in schools despite efforts by the Central Bank and indeed the government to push it. Nevertheless, there are several ways we can still instill financial literacy amongst our children and in today’s article we will discuss how to teach 3 to 5 year olds about money.
What is money?
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Kids from as little as 3 should already be used to their parent saying things like “I don’t have money” or “there is no money”. As such they intuitively know the word “money” even if they do not know what it is or how it affects them from getting what they want. The first thing you want to do is to tell them what money is and how you need it to buy things that kids love such as ice cream, chocolates, sweets etc. You should also tell them the difference between what is free and what can be paid for. For example, kids early on can know that playing with their friends which is something they value a lot is free. However, eating ice cream which is something they also love cost money.
How to get money
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Kids are quite inquisitive and will want to ask you how next how to get that money. This is important as this is an opportunity to explain to them why you have to wake up every morning to get to work. You can start by describing your job to your kids and even taking them to work if it is possible. Tell them you get paid every month for the work that you do and it is from that money that you buy them ice creams and bicycles.
Also show your kid that people they know and are used to also work. For example, their nanny, house help, gatemen, teachers, bus drivers etc. are all people kids know and easier for them to understand that what they do every day is work and is paid for with money. Kids need to also know that some people work for themselves and do not get paid a salary.
Patience is key
For us as adults, financial discipline is what we still learnings even after decades of working and knowing about money. Some adults find it difficult to understand that they have to wait and be patient to buy you can buy something. As such, it is important for kids to imbibe this culture earlier on. Teach your kids why it is important for them to be patient whenever they want something that money can buy. This helps them lower their expectation.
Teach them to save
Now that your kids understand what money is, how to get it and how to be patient the next is to teach them how to save money. Kids at this stage cannot work, however you can start now to teach them the habit of saving. Research shows one of the best ways is to give kids a piggy bank where they can save money or cash gifts given to them. I prefer to use a transparent empty jar clearly labelled “save” for the child to see. You tell the child to drop all the money she receives in the jar and can only start spending it once it is full. Many parents do this already and I am sure they can testify to hos useful it is as an early educational tool for kids.
Teach them to choose wisely
Kids learn very fast when they are young and hardly forget what they taught particularly if it something that resonates with a story. As such it is critical for them to understand the difference between things that you want and things that you need. One of the easiest ways to teach kids this difference is when you take them out shopping. At the grocery section you can tell your child food is something that they absolutely need. Let them see that buying a loaf of bread is more important than buying a bowl of ice cream. Let your child know that diapers are as important as toilet rolls and that they rank very high on as a need. Toys which kids also absolutely love should be pointed as a want that can only be bought when food and other important needs have been secured. You can even have your child choose for themselves what a need is and what a want is. They can tell you which toy or dress or chocolate is absolutely a want or which is a need.