In a world where financial decisions are made daily, equipping children with financial literacy from a young age is a necessity, said Rose Miller, financial education consultant with the JN Foundation.
“Early education in money management lays the foundation for responsible financial behaviours” Mrs Miller pointed out.
She said it is important that children develop a healthy relationship with money, one that fosters responsibility, confidence, and purpose. “It’s not just about saving for a toy or a phone; it’s about nurturing a mindset that sees money as a tool to achieve personal and financial goals and do good,” she said.
“We want them to understand money, understand the value and the power it holds,” Mrs Miller explained. “It’s what you use to achieve your financial goals.”
The JN Foundation consultantinformed thatone of the key objectives is to dismantle the belief that wealth is reserved for a select few. Instead, children should be encouraged to see financial success as achievable and inclusive.
“It’s not a certain set of people who can be wealthy,” she said. “We want them to have a positive attitude towards money, one that has as its foundation good values and an understanding of philanthropy.”
By normalising conversations about money, Mrs Miller explained, that this will break the traditional silence and stigma surrounding financial discussions. “It’s not taboo,” she insisted. “It’s just about having an open, honest conversation, investing the time and resources to ensure that when it comes to handling and discussing money, they are comfortable and confident.”
She recommends the following three steps to teach children financial literacy:
Goal Setting with Purpose
Guided and support children in establishing their own financial goals, which will vary by age, from small savings goals for younger children to longer-term plans for teens. Through this, they learn the concept of goal duration or term, short, medium, or long, the associated timeframe for each and what is possible in each category.
“Teach them how to set SMART goals,” she asserted, Specific, Measurable, Achievable, Realistic, and Time-bound goals, a powerful theory not only for financial planning but one that will serve them well throughout life,” she explained.
Earning and Budgeting
She informed that goal setting is one piece of the financial literacy puzzle, another equally important piece which is directly align is teaching children how to earn and manage money through age-appropriate means, whether through chores, allowances, fundraising initiatives or even entrepreneurial ventures.
“They learn the connection between working and earning as also the value of budgeting — even with small amounts they receive,” she stated. “As they master the art of budgeting, they will be well positioned to achieve their financial goals.”
Learning from the Journey
Beyond pursuing and reaching a goal, children are also encouraged to reflect on the journey and take full advantage of the many valuable lessons. If they fall short, they’re taught how to take corrective measures, adjust their plans and learn from the experience.
“Parents can help them to reflect and evaluate,” she explained. “So that the next goal they set, they’ll be in a better position to achieve.”
Financial literacy is not just about saving and investing, it encompasses a broad range of skills and knowledge essential to making informed financial decisions throughout one’s life. It’s also about building confidence, and a mindset that empowers children to take control of their future.
“Starting now, let’s all help our children have a better relationship with money, a tool which can be used to shape their lives but never define it” she said.
