Everyone understands that it’s imperative to learn to read and write but there is another form of literacy that our children need to learn to succeed – financial literacy.

One of life’s most valuable skills is the ability to manage your finances effectively.

Teaching children about financial literacy is a fantastic gift that can set them up for a lifetime of financial well-being. Here are some practical steps to help instil financial wisdom in your child:

1. Start Early: Financial concepts can be introduced as soon as your child can understand basic math. Use simple, age-appropriate activities to make learning fun.
2. Use Real-Life Examples: Incorporate financial lessons into daily activities. For example, involve them in grocery shopping and explain how budgeting works or how to compare prices.
3. Introduce Basic Concepts:
   • Saving: Open a savings account or use a piggy bank. Show how saving a portion of their allowance or earnings from chores adds up over time.
   • Spending: Teach them the difference between wants and needs. Discuss the importance of making thoughtful decisions about purchases.
   • Earning: Encourage them to earn money through chores or small jobs. This helps them understand the value of work and earning.
4. Create a Budget: Involve them in family budgeting activities. Show them how to allocate money for different categories like savings, expenses, and fun.
5. Set Goals: Help them set short-term and long-term financial goals, like saving for a toy or a bigger item. Teach them how to plan and track their progress.
6. Use Tools and Resources:
   • Apps and Games: There are many educational apps and games designed to teach kids about money management in an engaging way.
   • Books: Find age-appropriate books about money. There are many great children’s books that teach financial concepts through stories.
7. Teach the Value of Money: Explain where money comes from and how it’s used. Discuss how earning, spending, and saving are interconnected.
8. Lead by Example: Demonstrate good financial habits. Let your child see you making thoughtful spending decisions, saving for future needs, and managing your own money wisely.
9. Encourage Giving: Teach them about charity and the importance of giving back. This can help them understand the broader impact of money and the value of generosity.
10. Make It Fun: Use games, interactive activities, and real-life scenarios to make learning about money enjoyable. This could be anything from a board game about money to a family savings challenge.
11. Discuss Financial Decisions: Talk about financial decisions openly. When appropriate, involve them in discussions about larger purchases or financial planning.
12. Provide Feedback and Celebrate Success: Acknowledge their efforts and celebrate milestones. Positive reinforcement will encourage them to continue practicing good financial habits.

There are many apps that are great resource for parents to support them in educating their children about managing money including Spriggy, Savings Spree and Bankaroo. These may be a great entry point to introducing your child to money management to set them up today for a bright financial tomorrow.