Make them money saving experts: Teach children the value of money

Make them money saving experts: Teach children the value of money
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Published January 31st, 2016 - 09:19 GMT via SyndiGate.info

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Save the next generation from financial illiteracy by teaching them about money when they're young. (Shutterstock)
Save the next generation from financial illiteracy by teaching them about money when they're young. (Shutterstock)

Good financial skills are vital to ensure, as adults, we get through life without too many bumps or pitfalls. From making a savings plan to ensure security after retirement or in the case of an emergency, to avoiding debt, a healthy understanding of the concept of money is essential.

Like most things, it's good to learn about money and, most importantly, to start implementing the learnings at a young age.

However, still today many children grow up into adults who can't properly save, spend and budget. In fact, a recent survey on savings carried out by compareit4me.com on UAE residents highlighted this. Our findings revealed that 53 per cent of respondents don't think they earn enough to allow them to put anything into savings, with over 30 per cent admitting they do not save a single dirham and 13 per cent say they believe life is too short to save. These are quite worrying statistics, especially given the fact pensions and social benefits don't exist in the UAE, so even greater importance should be given to financial goals.

To avoid the next generation making bad financial decisions and to help them enjoy financially fit lives, children need to be taught the essentials about money. If you're a parent, this doesn't mean filling your child's head with financial facts and strategies, rather offering them age-appropriate money lessons. It's never too soon to start either, as children as young as three can grasp financial concepts, particularly saving and spending.

I've got a daughter who is nearly four years old and my wife and I made the decision to start teaching her early about the concept, and importance, of saving. We were also conscious of the need to provide her with an understanding about earning your own money.

Obviously, there are many different ways to teach a child but, for us, we found giving her a money box so she can save up her own money and buy something on her own has worked well. We've also taught her about the value of money, by explaining how there are other children around the world who are less fortunate than her and don't have as many toys, for example. Young children generally know money comes out of a wallet and ATM machines, but they may not fully understand that it has to be earned. We frequently explain to our daughter that mummy and daddy go to work to earn money so we can buy nice things.

Slightly older children (three-five years) can be taught about making choices around how to spend their money and the importance of comparing before buying, while those in their early teens can be educated about topics like saving a percentage of all money they receive and how using a credit card is like taking a loan. Late teens, meanwhile, should be clued up about the importance of paying off bills in full every month and saving for their future.

There are also numerous smartphone apps, which can be downloaded to help teach children smart money skills. The visuals and games featured on apps like Savings Spree and PiggyBot, add a fun element to the learning process. Whatever the age of your child, there is a valuable lesson they can be taught. Whether it's with the aid of digital apps or not, it's simple lessons like these that we teach children today, that will give them a solid foundation for making wise financial decisions in the future.

By Jon Richards

The writer is the CEO of compareit4me.com. Views expressed by him are his own and do not reflect the newspaper's policy.

 

Copyright © 2016 Khaleej Times. All Rights Reserved.

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