We discussed financial literacy for kids under the age of 5 and highlighted interesting methods that can be used to introduce them to money. Kids are simply adorable and with their brain as sharp as a razor no better time to inculcate great morals on them, than at their formative years.
This time we will look at financial literacy for children between the age of 6 and 10. This age is particularly critical as it is when they get into primary school and remain there till they are past 10. This stage is fundamental to imbibing a strong view about money that can help them in the rest of their lives.
At this stage, we believe a child already knows what money is, how it is earned and how it should be spent. But these are just the basics. The age 6 to 10 brackets could be further developed with these steps.
In the last article we mentioned that you can help your child prioritize by having them select the most important thing to buy at the grocery store. At age 6 to 10 you can develop this further by actually giving your child about N500 and asking her to choose which fruit or which loaf of bread to buy. This is the best way to introduce your kid to understanding the concept of pricing and bargaining. She could see two loaves of bread with different prices and can with her judgment know which each cheaper. It also presents her the opportunity of knowing if the money can buy her some bread and still leave some change to buy her favourite fruit.
Introduce an incentive
Incentives are one of the easiest ways of getting people to do things. It is also a very good way effective teaching and imparting knowledge. Children also need incentives and applying the right one goes a long way to helping a child learn to properly utilize money. For example, at the grocery store you can have your child keep whatever amount she saves from her spending in her piggy bank. If she rather spends N400 instead of N500 on a loaf of bread then incentivise her by allowing her keep the N100 change.
We live in financial times and kids can all around them see tools of modern day financing. Start by explaining what a bank is and why people use them. You can start by explaining to them that a Bank is a bigger form of their piggy bank and that rather by being managed by your kid, other people who manage the money for them. Explain that banks are were salaries are paid and the best place to save money. Kids should know early on that keeping large sums of money is risky. For now keep it simple and just stick to the deposit (savings) aspect of keeping money in the bank.
Other Financial Instruments
Your ATM Cards, Online tokens, tablets, computers, cheque books etc. are also financial instruments and it can be helpful to introduce them to these gradually. Let you kid know that the ATM card is used to withdraw or deposit money from a bank. Let them also understand that payments for such things as cable TV bills can be paid from your mobile phones or laptops without having to go to the banks. This is very important for kids as it helps them know and understand that financial instruments are not toys that they can play around it.
Kids can also be taught to learn to protect valuable information such as their names, birthdays, addresses, names of their parents etc. With the advent of online banking, bank depositors are expected to keep multiple passwords in a bid to access their accounts safely. Most people who use the names of their kids as passwords can easily fall victim to hackers who gain access to your banking platforms.
We use platforms such as laptops, mobile phones, tablets etc. for these things. Kids also have access to our gadgets and play with them whenever they are free. As such, they have access to our log in details which can be dangerous if it falls into the hands of unscrupulous people.
Another thing you should is activate the parental control feature of your gadget whenever it is handed over to kids around this age. Kids should also learn to not buy things online without your permission.
It is also helpful to take your kids to the banks occasionally. As a kid I looked forward to accompanying my mum to the bank. You can once in a while take your kid to the bank. Kids assimilate fast and taking them to the bank puts everything you have told them into perspective. They are also inquisitive and will ask you questions that at the end of the day help them understand the environment better.
Most parents open a bank account for their kids as soon as they are born. However, the kids can only access the money when they 18 years of age. Nevertheless, nothing stops you from letting your child know she has a bank account and that every money she saves will be deposited there once her piggy bank is full. This can even be a way to get them to accompany you to the bank.