Financial Education Should Begin Early For Your Kids
By Acceler8now.com Investment Education Team
October, 2007
Financial literacy is a tool against poverty. It is a weapon against want and financial instability. Financial literacy, which comes from financial education, is a liberating condition that opens doors to financial success, simply because it gives one control over his future. Does financial literacy so simplify the drive for financial success? Not necessarily. Financial success is a journey and a long, tasking one at that. Knowledge alone is not a magic wand to solve all financial challenges. For one, it must be applied to yield results. But it does put the beneficiary in the driving seat, empowering him to execute maneuvers that can take him to his financial goals. Even that goal-destination will benefit from financial education which can help the individual understand goal-setting and to refine his goals to have purpose. All this should paint the background of a major life tool, which is what financial literacy truly is. That's just why you must make it a priority goal to begin to impart it to your children, even while just growing.
Errors of the Past
If you are like most grown-ups, there will be plenty to regret about the things you didn't get to learn in time, especially about money and investments. Unless you have the added misfortune of not having learnt, even at adulthood. Most of us don't get early opportunities to learn some basic life-building financial principles and strategies, and so, end up paying dearly by failing to take advantage of available and sometimes easy opportunities, rather living life the hard way. Some are lucky and gradually begin to read the right books, access the right information and somehow eventually get to learn the right lessons. But so much time and opportunity would have been lost, all the same. The big challenge, my friend, is to save your children that same ugly experience of walking and working in the dark for a significant part of their lives. Give them an early positioning that will help them shape their lives for success and realise their potentials in good time. Here are some basic things you should help them learn as they grow up and tools that can help you to achieve good results:
What to Learn and When
There can be no hard and fast rule about when to learn what, but you must note that the smarter your kids become the better it is for your family and their future. The earlier they know the right things about money, the more they can cope with situations confidently and begin to learn to take control of life. Leaving it to chance is not an option because many are bogged down in poverty, as you read this, just by virtue of plain ignorance and lack of financial knowledge. The right time to start teaching is while they are toddlers: learning to recognise money and eventually knowing denominations is a starting point. Cue it from there up, introducing more serious dimensions as the child advances: the use of money, how it comes through work and effort, how when spent it's gone, how it must be available for items to be acquired in exchange, why prudence is needed, spending and saving, use of bank account, writing of cheques and other means of payment, interest rate and the reward of invested money, shares and how they work, etc. It is a continuous meal and every opportunity to engage in further learning should not be missed. Practical experience appropriate at a given stage should be explored. Even money games (the likes of monopoly) are useful. Placing teens on allowance to manage and account for, including showing ability to save some, is a good lesson. Depending on your scope of knowledge, you may also seek opportunities for them to learn from other sources. What you must realise is that this is a pure necessity: don't throw your kids into the challenging world of today (and tomorrow) with extremely limited financial knowledge. Before they will learn on their way, they would have lost a lot of time and ground.
Some Valuable Resources and Tools
Learning from you is important and you have to aim to pass all that you know. Chances are, though, that you don't know everything. Nobody does. So, seek to deploy all the tools you can. Money games have been mentioned. Books for different stages of life are important sources of relevant learning. Websites like this one are quite rich. Other sources of information that can impart appropriate knowledge should be provided. Exposure to financial transactions as soon as possible will help: running a bank account, for instance. Above all, your own examples in how you operate will make a lot of impact. Do you demonstrate financial knowledge in what you do and do you share those experiences? Do you echo money principles?
If you take it to be a priority goal to bring your children up with sound financial knowledge and a lot of practical exposure to financial principles and transactions, it is easier to take action that can achieve that goal. And they will be the better for it. The big problem is that most parents don't see the need (it's not an issue), school curricula don't have it at all levels and unless a child is lucky to specialise in the financial disciplines, he could reach adulthood without knowing much about money, investments and all those ideas that could be very helpful in building finacial capacity. Don't let that be the fate of your kids, please.
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