Financial Education for children

Image result for financial education for childrenIt is important to inculcate some of the fundamental aspects of loans Continued.

The education you provide to your children will determine the kind of people they will be when they grow up. As responsible parents, we must help and prepare our children to be productive and independent adults, self-confident, respectful of others and successful.

Part of their development is financial education, teaching them the importance of saving and investing their money. Take into account that without a solid financial education, the development and future possibilities of people may be affected, since the financial decisions they make will condition their lives.

Childhood is the best stage for children to acquire habits and learn everything necessary to be successful people, and with the following tips, you will start your financial education.

Lesson 1: Set a good example

More than advice, children follow the example of their parents better, hence the importance of checking with your example that a healthy financial behavior gives good results. If you are a spender and live a day, your child will have the same behavior.

Show them with your example that they should not buy on impulse, but set priorities and learn to distinguish between things that are necessary and those that are tastes, that compare prices and save. Let them realize that sometimes you have to wait to buy what they want.

Lesson 2: Talk to your child about money

Lesson 2: Talk to your child about money

The little ones do not care where the money or its value comes from, as long as they get what they want. However, it is convenient that from a young age they have a real relationship with money.

At the age of 5 or 6, they are able to understand basic financial concepts, such as:

  • Mom and Dad have to work long hours to earn money.
  • The money they pay us, we leave it in a bank to keep it.
  • That money is necessary to pay for important things like the house, the car, the gasoline, the food, the school, the clothes, the electricity, the telephone, etc.
  • Only the money that they saved us can be taken from the bank or from the cashier. Every time money is taken out, there is less left in the bank.
  • When you buy something with your credit card, you also spend the money saved in the bank.
  • If everything is spent, there is no more left.
  • You always have to save a little to be able to buy special things like gifts, vacations or for emergencies.
  • Having more money does not make one person better than another, it simply allows you to have more opportunities.

Lesson 3: Pay

If you are accustomed to giving your child a weekly pay, let him know that it is not about distributing money. Pay is the child’s first experience about financial independence. It helps you educate you about the importance of personal budgeting. The goal of pay is to teach your child the importance of managing their money well, and not simply rewarding or punishing behaviors.

Experts recommend giving a weekly base amount, with the possibility of earning something extra for doing certain additional jobs. This way you will learn to plan with regular income and know the value of a job well done.

The payment should help you so that the children learn:

  • That the money is not unlimited. They only have a certain amount.
  • You can not buy everything you want: you need to prioritize and then save to achieve a goal.
  • It costs work to save.
  • The difference between needs and desires.

Lesson 4: Encourage savings

Image result for savings

One of the best gifts you can give your children is to encourage the habit of saving. Instead of forcing you to save the money you receive, it is better to wait until you want something and take the opportunity to explain that you can buy what you want with your own money and that you can help get it. Follow these steps:

  • To plan
  • Save and save
  • To buy stuff

In order for your child to have more incentives to save, let him set his own priorities, within reason. It is advisable that your first objectives are easily attainable, for example in two or three weeks at the most. As you grow older, you can set longer savings periods to purchase more expensive items.

Lesson 5: Your first bank account

Most banks offer savings accounts designed especially for children and teenagers. Child savings accounts are usually characterized by:

  • Total liquidity. That is, one can enter and withdraw money freely.
  • They do not charge commissions.
  • Low remuneration: The interest rate they pay is very small.
  • The ages of the holders vary, they can be from little ones of a year up to a limit age determined by each institution.

When you open your account, let it be a special occasion. It is better to accompany you to the branch to receive your documents by hand. If you have confidence with any employee of the branch, ask him to receive it, shake hands and treat him as a client, it will be an experience he will never forget and will give importance to the management of his finances. Encourage him to continue depositing money on a regular basis.

Lesson 6: Teach them how to be an intelligent consumer

Image result for intelligent consumerThe ads are increasingly directed to children because their desires have a great influence on the family economy. Help them to value advertising critically.

  • Young children can not tell the difference between a television show and an ad. Sit down to watch their favorite shows with them and play saying ad! when one appears.
  • Explain the function of advertising: convince people to buy a certain product, but they only point out the positive characteristics and not the negative ones. Make them see that sometimes everything they say is not true. Ask your children to invent an ad about a product they know, but do not like much, trying to highlight their qualities.
  • When they’re in a store, compare the actual products with what they say in your ad. Ask what differences you notice and which is more attractive, the announcement or the reality.
  • When they go shopping, teach them to compare two products for their price, size, and quality. Explain why one is better than another.

No matter how old your children are, it is always a good time to teach them financial education. And in Real Credit, you find the necessary information to make your little one’s successful people.