How do we learn about money and educate our kids about it?
Money! Money! Money! We can love it, we can hate it but we just can't ignore it. Every day almost everyone on this planet uses money. Money is just a piece of paper, but our habits, beliefs and attitudes behind money bring it to life. Money wields a great influence in our lives. It affects the house we live in, food we eat, the clothes we wear, the cars we drive, way we travel, our friends, the school we go to, the college we attend etc..Quoting Robert G. Allen
“Money is one of the most important subjects or your entire life. Some of life’s greatest enjoyments and most of life greatest disappointments stem from your decisions about money. Whether you experience great peace of mind or constant anxiety will depend on getting your finances under control.”
How do we learn about money?
Money which makes the world go round doesn't come with instructions or a training manual. Our education system focuses on scholastic and professional education. In school we are taught so many subjects but not about money. Yes we do learn about Profit/Loss, Simple Interest/Compound Interest, but in school we are worried about solving the questions and getting marks.
Our attitude towards money is a result of many influences in our life: such as parents, friends, media etc. And talking about money is considered to be impolite rude, embarrassing or scary, as if we should Beware Money.
Should we teach our kids about money?
There are two streams of thoughts.
Many people feel that we should not speak to children about money, as they feel it would make them money-minded. Anyway one learns about money, they were also not taught by their parents. They learnt it as they grew
There is another group of people that feels that children should be spoken and taught about money. I should avoid watching my kids struggle through life with money troubles. “Rather than give a hungry man a fish, it is far better to teach him to fish for himself, then he will have food of his own for lifetime”
Research shows that children want parents to teach them about money.
76% of college students wish they had more help preparing for their financial future, but only 31% of 9-12 years say their parents discuss finances with them.
When should one start teaching kids about money?
It's important to work on your child's financial awareness early on. If a ten year old likes to hang out at malls, spend today, how would be her/his spending habits when she/he grows up? Kids who really like spending money when they're 10 will probably grow up to be adults who really like spending money. Some age related milestones:
Age 5-7 Identifying money. Understand that things cost money, a piggy bank.
Age 8-10, COMPARE PRICES, difference between Needs and Wants, Advertisements, Credit Cards bill needs to be paid, a piggy bank and/or saving account.
Age 10-15: Saving Accounts, Interest, Bank, Loan, Credit Cards, Budget, and Compound Interest
Conclusion: While it is important for every one to learn about money, it is equally important that we educate our kids in early stages and create awareness to them.
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This is guest article from Kirti who is founder of Bemoneyawaredotcom. Kirti is engineering graduate with no financial background. Realizing that though she is literate and financially illiterate and doesn't want her kids to be same, she wrote a book for kids, developed bemoneyawaredotcom blog. Thanks Kirti.