Moms play an active role in educating their children in finances and also actively involve them in the family budgeting. I should know because I’m a mom. I can’t stress enough the importance of financial literacy to the youth, and how moms can better guide their kids in terms of making effective decisions on their financial resources. Finance management in a family household, can be better if you can teach every member of the family on becoming a wise spender and managing their finances better.
So here are five tips that you can use to teach your kids and help them become financially literate.
1. Teach your kids the value of savings.
Financial literacy is tantamount to saving. I believe that it is a vital “life skill” and it is never too early to teach kids about it. Younger children might keep their savings in a piggy bank, but older ones might want to keep their money in a real bank. My daughter opened a savings account at the age of 9 years old. Also, I give her Php100 as her daily allowance in school and let her handle her own money. However, I always tell her to follow the 20-80 formula. That means “Savings” is always the first part of the equation, and not the other way around wherein she’ll keep whatever’s left in her baon. Not the usual thing some people do na “I’ll save lang kapag may sumobra” mentality.
So first, my daughter keeps the Php20 as her daily savings and then works around the remaining Php80. That way, she’ll learn how to handle her own money, and how to spend below her Php100 baon. Also, it teaches her how the daily lifestyle choices that she makes can add up to big savings or big expenses, depending on how she chooses to spend (or not spend) her money. That’s how she learns how to self-regulate or delayed gratification.
Like for instance, when she decided to control her impulse to buy an expensive hair clip that she wants because she’s saving up for a sketch book that she needs in school. Yay! Music to my ears! Simple as it may seem but it’s the little things that make a huge difference on the way kids think. They will know how to control money rather than money controlling them.
2. Either watching a video or reading a book is a great way to teach kids about financial literacy.
Let your kids read books or watch educational videos from BDO You Tube Channel to help them learn about Financial Literacy. They provide educational videos, lesson plans, and discussion guides on such topics as savings, budgeting, and entrepreneurship, among others.
Watch this sample video produced by BDO Foundation & DEP Ed:
https://www.youtube.com/watch?v=QKCx9K5BJlo
https://www.youtube.com/watch?v=omhnONDsDq4
This is a video clip of BDO Foundation President Mr. Mario Deriquito and & Ms. Ali Sotto in the works from a webisode taping series type on financial education as part of BDO’s efforts to support BSP’s financial inclusion advocacy. In the video, they discussed on how BDO Foundation, the Bangko Sentral ng Pilipinas (BSP) and Department of Education (DepEd) are ramping up efforts to maximize the benefits of their financial education program for public school students through the K-12 curriculum.
As a parent, I commend the BDO Foundation, the corporate social responsibility arm of BDO Unibank, for their efforts on having the government involved in its advocacy on Financial Literacy, with the goal of helping students develop real-world decision-making skills that will guide them later in life. I fully support this advocacy because I believe that Financial Education should be taught in school, and it will be a big help for students if it’s part of school curriculum.
I don’t know about you but I do believe that whatever you maybe, an employee, a student, a start-up owner or a mom, you have to be financially literate. Needless to say, an early start on learning Financial Literacy pays off.
3. Share the spending and saving experience with your kids.
Whether you are saving for a toy or your child’s tuition, let them know where the money is coming from, and where they are going. Let your kids know about it and incorporate them with the actual saving and spending experience. Below are some real life situations that will help them understand where money comes from and how it is earned.
• How ATM works, and that it’s not just a hole in the wall where money comes out.
• How to save by comparing prices and picking the cheapest one when buying items at the supermarket.
• How it took you so many days at work to earn the money to pay the bills.
This “experiential” strategy not only prepares your kids for the real world but when they actually experience it, they will appreciate you for giving them the opportunity to experience it with you.
4. Let your kids set a goal and track their savings as well as their spending.
They can either SAVE their money for short term goals (like a toy or a dress), or SPEND wisely by making more frugal decisions. By letting them decide on what they want to do with their money, they can learn effective ways to manage their money early on in their lives.
5. Leave room for mistakes.
Part of teaching them on how to handle their money is letting them learn from their mistakes. Even adults make mistakes but there are lessons to be learned, for parents and kids alike. Sometimes it’s hard to steer kids away from doing a mistake, but it may be better to use that as a lesson. They’ll learn that life is full of choices and that poor decisions have consequences. In that way, they’ll know in the future what not to do with their money.
So, there you go. If you’re a mom like me, remember that teaching your kids about Financial Literacy can lay the foundation for a bright financial future for them. You don’t have to get a degree on Finance or Economics to figure it out, and if you ‘re as clueless as I was when I first started making money chats with my daughter, the tips I’ve mentioned here are a good place to start.
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