The Building Blocks of Financial Intelligence
Parent, to help your children become financially Intelligent, the following are the basic blocks that must be learnt and understood:
- Knowledge of the nature and value of money
Children need to understand the worth and value of money. This doesn’t just involve showing them how many items a 500 Naira note can buy as opposed to a 50 Naira note. Teaching them the value of money involves helping them understand how important money is; how much good one can be able to achieve with it; and how careful one must be with it to avoid various harms.
Knowledge of the value of money also involves understanding the need to be wise when handling money and how easily one can become enslaved to money.
With this knowledge, children will become more aware of the minted notes they hold in their hands as much more than just sheets with things written on them.
- The need for budgeting
How many times have you given “pocket money” to your child but he ends up squandering it? If you’re like most parents, you probably berated the child and told him he’ll have to keep managing until the next pocket money comes.
The question is, have you taught the child how to budget their spending to avoid spending everything? Does the child know how to use dates to account for how much should be spent every day?
Children need to learn the need for budgeting their finances. They need to understand how to plan their spending even before they receive the pocket money
- The culture of saving
When children get money, all they think of is how to spend everything at a go. Most kids (even adults) don’t know about savings and how to go about it.
For a child to be financially intelligent, such a child must have the skill of saving from whatever he or she has “earned.”
Even though the entire savings may not amount to something significant at the end of the day, the very act of saving will improve the child’s financial abilities.
- How to make money
What? Teach kids how to make money?
Yes. It’s not a good idea to wait until a kid becomes an adult before you train them on how to make money.
Understanding how to make money and knowing that one must work for it will open up their minds and help them do better in the future. Contrary to what parents think, kids are not too young to take certain responsibilities. They need to take these responsibilities to help them grow.
If your child can speak the money language, there is an increased chance of them being able to live a wealthy and prosperous life in the future.