We often hear people say that the younger generation are really good at spending money. But can they save money? Do they know how? Are they aware about credit card debt? Is investment part of their plans for the future?
The best way to raise financially savvy adults is to start them young. The earlier our child starts learning about financial education, the better off he or she will be. Although financial education may be offered at schools or learning institutions, an important fact remains – parents are still their child’s first teacher and can have a great influence on their child’s financial education. Teaching children good money habits, therefore, must start at home.
Speaking of home, at Idrissi International School where parents and teachers work together to bring about the real world at hands, we are not only educating students to be financially literate but most important harnessing the mindfulness of valuing money in all respects be it in the context of one’s responsibility towards nature and environment or a duty for one self to the community and the Ummah at large. Above all, in the financial literacy lesson, students would learn the concept of ‘Amanah’ and ‘Syukur’ that serves greater purpose in life other than just gratifying one’s needs.
Let us look at some tips on what we can do to teach our child the importance of financial literacy:
- Be a good example
The adage saying, “Monkey see, monkey do” can be applied here. Yes, our children watch and mimic almost everything we parents do – from eating, talking, dressing, behaviour to how they manage their money. Therefore, by setting a good example, parents will help their children establish positive habits to last through their lifetime.
- Start saving – at any age
There is no age limit to start saving. A child who puts aside part of his/her pocket money or
allowance each week is building a great habit of saving that will help his/her financial future. By
discussing short-term and long-term savings goals, parents also share the principle of giving part of what they have to help others (eg. donation to charity).
- Keep a Budget
Having open discussions about the family’s savings and expenses and how to keep a budget will help a child set up his/her own budget – how much to save or spend or invest, is it a ‘need’ or a ‘want’, and so forth.
- Go shopping together
Shopping with your child is a great opportunity to talk about and compare relative prices of products with their value. Why does this bread cost RM0.50 more than the other one? What does that extra RM0.50 buy you? Is it worth it? Do keep in mind that shopping together also fosters the bond between parent and child.
- Have financial conversations
It is true that financial matters can get complex. However, kids who learn the basic principles of
earning and saving money, the cost of things and how to budget their expenses and such, will be in a better position as young adults to understand the more complex issues of loans, credit cards and
By introducing our children to solid financial principles early, we parents are preparing our children for the “real world” out there.