We Can Create A Generation Of Money-Savvy Kids By Teaching Financial Literacy
There’s that old saying that no one likes to hear: Money won’t solve a money problem. We don’t like to hear it because it means we have to be accountable for the reasons there’s a shortage. Is it an inability to manage money? Is it an inability to earn enough? Understanding how to budget and manage your living expenses is an essential skill. WIthout this knowledge, a university degree or a great job will still not sustain your children as adults.
The problem starts with our belief system
Our belief system dictates our life choices. Phrases like “I am no good with money”, or “managing money is not my thing” or “I just can’t understand numbers well” indicate that there’s an inherent lack of understanding. Being money-savvy isn’t a skill you have to be born with, it’s learned. These flawed belief systems start in school and are especially prominent among children who don’t excel at maths subjects. Financial literacy isn’t taught at schools, but it should be. Alongside this gross lack of education, we’re also seeing pop culture make light of over-spending and debt, glamorising self-imposed poverty.
How a lack of financial know-how impacts society as a whole
A societal problem, like a lack of financial literacy, happens as a result of generation after generation believing they’re not good at maths, when in actual fact they simply haven’t been taught how to work with money. This results in power imbalances in domestic settings, typically, the man works with the money and the woman has no idea what the bank accounts look like. As a result, it is often difficult for the woman to claim accountability for the finances and walk away from the relationship, if she chooses. In cases where both partners lack financial literacy, debt increases and living within their means becomes unattainable.
How we can fix it going forward
Parents can take matters into their own hands and not leave education entirely to the schooling system. Allocate pocket money to the children and expect them to manage a few of their own expenses.
In previous decades, children mowed the lawn to earn their pocket money. Today, there are still ways in which they can help around the house. Decide how much various chores are worth in a monetary value. Allow the children to earn their pocket money by choosing the chores they wish to do.
Learning how to budget can be done at home. Assign your child exercises, like managing the shopping list within a budget. Visit the grocery store together with a budget and a list and find ways to make the items fit into that budget.
Discourage negative belief systems. Don’t allow yourself to use phrases “like you’re just not that strong at maths” and instead use phrases like “how can we support your understanding of maths?”. It is also important to separate maths and managing money. A child that struggles with maths might still be good at budgeting.
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Disclaimer: This is general information only and is not advice of any sort. No warranty or representation is provided by Accounting Heart Pty Ltd as to the accuracy, currency or completeness of the information contained in this blog. Readers of this blog should not act or refrain from acting in reliance upon any information contained herein and must always obtain appropriate taxation and / or other advice as may be appropriate having regard to their particular circumstances.