Essential Financial Skills For Your Kids

Money cannot buy everything, but it can buy a lot of things. As a parent you will know that most decisions in life are linked to money and finances, and can be costly if not managed well. Jobs and careers are linked to income; housing and accommodation have insurance, utilities and other cost implications; and we need money for many other essentials such as clothing and travel.

This makes it important, if not crucial for financial knowledge and skills to be acquired by all. The latest study by the National Financial Educators Council on financial literacy revealed a low level of knowledge among children. Ages 10 to 14 children scored an average of 55%, with those aged between 15 to 18 years obtaining an average score of 61%.

Mastering Financial Skills

Children need to learn important life skills, and developing skills in money management is no exception. We all care about giving our kids the best education, and even pay for our kids to receive some lessons and learn other essential life skills. It is also important that kids are prepared to take financial charge of their future. According to a Santander survey, about 32% of parents said they wished they had been taught about the importance of saving money by their parents when they were young. If not taught, tomorrow’s future leaders will lack essential financial skills necessary to manage their lives, their careers, their families and the world. Teaching kids skills such as how to budget, the importance of paying bills and other commitments on time, how you can check up on your credit score, and how to make savings and investment decisions can go a long way to prepare them for the future.

Early Financial Experience

Experience, they say, is the best teacher. Hands on financial experience will help children to grasp the knowledge of the matters that can affect one’s finances, and have the opportunity to learn the essential skills required to be financially successful. Parents should start involving their kids in financial matters and some financial decisions early, and a study suggests they will understand even at an early age. One of the early financial lessons you can teach kids is to save money, and avoid financial waste. The study also revealed that children – 89% of boys and 77% of girls – like to save for sweets, treats and entertainment products as well as spending on outings, holidays and gifts for families. 20% had also started thinking about saving for university, suggesting a lesson about thinking of the future.

Teaching your kids valuable life lessons that includes financial education will enable them to make good decisions, and give you peace of mind. Encouraging them to save money will also teach them to value their money, whilst encouraging them to be independent.