Parents are not only responsible for their own financial education. In addition, parents can impart valuable knowledge to their children and lay the foundation for financial success. The state school system leaves a lot to be desired in terms of financial education. But anyone can grumble, acting independently is the motto. After all, it is up to everyone to improve their financial education and to pass it on to their beloved descendants. The following 10 tips will help you with the playful implementation.
1. Show the finiteness of money
Parents should show their children early on that money is finite. After all, over time, the children’s wishes become larger and more expensive. With a limit on pocket money, the children learn early on that you cannot buy everything. Often a decision has to be made between two toys that both seem equally great. What can break a parent’s heart is an important lesson. Children learn how to handle money at an early age. In addition, it is not a nice feeling for the little ones to have too little money to buy. Children are given the opportunity to set aside a financial buffer – a skill that is worth gold in later life.
2. Strategy for financial education
The children are there, time flies by. When the child reaches elementary school age, a financial education strategy is needed. After all, it is not very promising when parents, as senior teachers, puff themselves up in front of the children and rant about the dangers of the financial world. Playful learning is the motto! At best, parents set a schedule and plan their financial education. From the first pocket money to additional income and an overview of the budget to further financial education, everything is possible – step by step, the children become real financial experts.
3. Promote creativity and entrepreneurship!
Additional earnings and creative activities are welcome – if the children see money as a finite good, the next step follows. In their search for additional income, parents can encourage their children’s creativity. How can you make money? How can I increase my pocket money? With the necessary freedom and support, the children will not only become financial experts, but possibly also successful entrepreneurs.
4. Positive attitude towards money
“You do not talk about money!”. Unfortunately, this attitude is widespread. But why is money actually a taboo subject in many households? In order for the children to develop a positive relationship with money, tabooing is the wrong way to go. Rather, the advantages of wealth accumulation and freedom should be presented. After all, it is by no means reprehensible if the children want to earn a lot of money later.
5. Illustrate interest
According to Albert Einstein, compound interest is the eighth wonder of the world. Those who use interest let their money work for them. It doesn’t hurt that the days of savings accounts and interest seem to be over. Parents can negotiate an individual contract with their child and pay reasonable interest for “saving”. The children learn early on that it makes perfect sense not to always spend your own money, but to invest it wisely. As they get older, parents can demonstrate the benefits of investing in an ETF savings plan to their child – numerous ETF calculators are available for this.
6. Make money early
There is a financial bonus for the children when completing various tasks. Parents can hand over small tasks to their offspring. This can earn some extra money. As a result, children value money more. Fulfilling special requests always requires a certain amount of effort. It is therefore up to the children to decide whether they are ready to work for what they want.
7. Talk about money wisely
Which parents don’t know that? A word slips out of the conversation carelessly and the children have learned something new again. Such carelessness can have far-reaching consequences in financial education. Anyone who speaks negatively about money or unintentionally imparts false values to the children thwart their financial upbringing. As a result, parents should weigh every word about money carefully – only when mom and dad are alone are there no limits.
8. Learning from personal responsibility and from mistakes
The pocket money belongs to the children – nobody else! Thus, the children should also decide independently how the pocket money is used. Regardless of whether it’s a new comic, the tenth cuddly toy or a useful book – when the children make independent decisions, this has a positive effect on self-confidence. The opposite is true when parents want to be in constant control. In addition, adults should not protect their children from making wrong decisions. Every bad purchase has its function, because children can learn from mistakes.
9. A dog named Money from Bodo Schäfer
There are financial books for young and old. According to the motto “Knowledge is Power”, the children can continue their education with an age-appropriate financial book. Bodo Schäfer has published a children’s book in a class of its own with his book “A Dog Named Money”. One day a little girl finds an injured dog and brings it home. The Labrador named Money is amazingly speaking and is a real financial genius. As a result, the dog explains to the girl everything there is to know about the world of finance and gives tips on how to manage money.
10. Enjoy childhood!
Providing financial education to one’s own children is worthy of all honor. Nevertheless, parents should give their children the necessary freedom. In their childhood, the little ones should first and foremost be allowed to be children. As you get older, the previous tips can help explain financial basics in a child-friendly way and give the children an advantage in life. When the right time comes depends on the children. Good parents, however, notice when the beloved child is ripe for the first financial lesson with mom and dad.