Some claim that money doesn't matter, but in reality, a lot of matters involve money. It is very difficult to move around without money. The sad thing is, such a necessity can easily slip away from one's hands. Not everyone can be a mogul or be filthy rich. However, wanting to have a comfortable life does not have to be limited to dreams. Knowledge on money and budgeting should help very much. Indeed, people misuse their money because of the lack of financial education. Just like normal education, financial knowledge sticks to the mind best when the person is taught young.
Children should be taught the value of money while they are young. They should build healthy financial habits that will stick to them until they grow old. One such habit is saving money using a piggy bank. This is an old but effective financial habit of setting aside money for the future. This simple gesture is a way of inculcating in them the value of money. Children can be taught to save half of the money they receive from their parents and to put the other half in the piggy bank. When their savings reach a certain amount, they can buy a toy they like. This is a good start in learning how to save.
Another way of improving a child's financial literacy is through teaching them the value of work. They can earn from doing simple jobs such as washing cars, walking dogs, doing extra household chores, or selling old things at a considerably lower rate in a garage sale. Abake sale or putting up a lemonade stand are two simple business ventures for children. Parents can bake goodies with their kids the night before the bake sale. This can serve as a bonding moment for both the parents and the child. Also, parents can help their children price their goods and regulate the financial cash flow. The children can use their profits on their toys, clothes, amusement park trips, etc. This will teach them not only the value of money but to strive hard to get what they want.
Lastly, children should be taught to keep track of their budget by writing down their expenses in a small notebook. Before the day starts, they should allot a certain percentage of money for certain things (20% for food, 5% for arcade games, etc.). At the end of the day, if not all expenses are accounted for, the parent should give the child a reasonable penalty.
Financial literacy does not have to start with complicated concepts. Good financial habits for children have to be simple yet effective.