Financial Intelligence in Children – 10 Tips for Parents.
Education encompasses all basic knowledge and skills required for individuals in their careers and life. They should have a few important skills and techniques at their disposal. Many of them can be learned or acquired by students at home, in classrooms, or outdoors. But skills such as financial intelligence can only be brought by habit and practice.
Most teenagers and young adults of this generation find it difficult to manage money. This is mainly because they were never taught how to improve their financial intelligence.
Hence, as parents, we need to start nurturing financial intelligence in children so that they can become more responsible and skilled at taking care of themselves.
Here, in this article, we shall go through 10 important tips for parents to improve financial intelligence in students.
Why should students start developing financial intelligence early?
Parenting is not easy. Hundreds of matters come your way as you fight through hurdles to give your children a wonderful present and future. Amidst all the time we put into their academic, extra-curricular, and daily life activities, we often forget our responsibility as adults to inculcate financial intelligence in our children.
Young teenagers grow up to become adults in the blink of an eye. By the time they grow up, they should be prepared and have ample financial intelligence along with other life skills at an early age.
Unlike the childhood of people from the twentieth century, our children live more in the virtual world than in the real world.
Due to these factors and the general lack of exposure to financial struggles, we should start developing financial intelligence among our children from an early age.
Kids do observe and learn from us and we must become examples for them. But they are also influenced by their friends and the content they consume from popular media. Hence, it might not be the easiest thing to deny them unnecessary luxuries in order to promote financial intelligence development in your child.
But with the right methods and approach, you can successfully foster financial intelligence among students. It will make them think more responsibly and practically in the years to come.
10 Tips to Inculcate Financial Intelligence in Students.
- Make students track expenses:
We all know that tracking our expenses is an important part of becoming a better saver. So, make your children track spending using a debit card, bank app, or the traditional way of writing and calculating on paper. This habit will continue as your children grow up and will help them manage their expenses better.
- Define Savings Goals:
Students may find it challenging to understand the importance of savings. So, you can help them define their savings goals. This will enable your kids to save up for what they want instead of waiting for you to buy them everything. You can help them set savings goals based on things they want to buy such as toys or tech products. That way, you can make the goals into manageable chunks for a start.
- Talk about Needs vs. Wants:
One of the first steps you should take to improve financial intelligence in students is by helping them differentiate between needs and wants. You can tell them that needs consist of essentials such as healthcare, food, basic clothing, shelter, and education. Whereas, wants are the rest of the expenses such as designer sneakers, movie tickets, the latest computer, or smartphone.
- Allow them to work & earn money:
The best way to make students understand the value of money is by earning it through hard work. You can make them do household chores or other tasks which they can accomplish without hindering their academics or other co-curricular activities. Studies show that this method can help to allow students learn how to manage expenses.
- Offer children a place for savings:
If you are aiming to develop a habit of savings in your kids, they need to have a place to save their money. If your child is young, a piggy bank might be ideal. But if they are a bit older, you should help set them set up a savings account at a financial institution or use a debit card that is suitable for kids.
- Allow them to make small mistakes:
We all learn to walk by stumbling and falling a little. The same goes for financial intelligence and management. If you leave some room for minor errors, students can learn where and what to keep an eye on. Moreover, you can use their errors as lessons to teach them their mistakes. In the future, your valuable lessons will help them recognize good from bad practices.
- Become your child’s creditor:
An important lesson you could teach your kids would be not to live luxuriously; beyond one’s limit. To impart this message, you can act as a creditor for your children. By “lending” your children money for small interests. This way, they will not spend unnecessarily and will know to wait for the things they want to buy.
- Be a great example:
When the COVID-19 pandemic hit the world, most of us were unprepared and faced trouble managing resources and money. We have learned more about the importance of savings. Having experienced such tumultuous times, we know how to prepare our kids to have the financial intelligence for a safer future. Hence, you can become a great example for your kids by demonstrating how to save resources and use them wisely.
- Discuss money:
To improve financial intelligence in children from an early age, you must talk about money, hard work, and how important it is to save money. However, many parents feel ashamed to talk about money as they think it will make their kids feel insecure. Instead, you have to cultivate a practice of talking about financial matters. This can help you implement the rest of the tips for financial intelligence more smoothly.
- Give incentives for savings:
Everyone likes free money and it motivates people to save more. The same goes for students. That is, if you provide a small monthly incentive for the amount your child has in savings, it will make them save up more and be more patient with their money.Foster Financial Intelligence in Your Child
Developing financial intelligence in your children may not be as difficult as you think. If you put some effort into making it a habit to talk about money and indulge in savings practices, slowly your kids will grow up to be smart and efficient individuals who give priority to financial intelligence along with other great qualities.