What skills do you think are necessary to teach young children when it comes to financial literacy? What skills do you wish you had mastered by the time you finished school? Don’t you think it would be great if we were all taught how to budget our money? Or shop for the best mortgage and keep the banks honest? What about negative gearing or trading the stock market?
For many adults most if not all of these subjects are put in the too hard basket. I get the feeling that most people learn these skills through trial and error. For those with kids at school I’m not saying we should lay all the blame on schools as education doesn’t stop there. Parents are responsible too, however if you have the privilege of being able to keep them home you can count yourself lucky because instead of your child sitting in the classroom ignoring the lesson because they know it or even worse, because they have no interest in it, you have an opportunity to add it in yourself in an unschooly way.
If you are on my facebook page you might have seen a picture I posted where we were playing a game called Cashflow for Kids. (Before you get your shackles up, I’m not an affiliate or anything, I won’t get paid if you buy it, my blog is way too small for that stuff.) Here it is again in case you missed it:
There are probably other great financial literacy games for kids out there, Monopoly is a great one, but I don’t know one that focuses on becoming financially free from the rat race as well as this one. Within an hour Miss 8 knew all about income and expenses, creating a passive income and how ‘doodads’ are just material possessions that you spend money on that are really liabilities. I think you can buy the game online for about $40AUD. We got lucky and found it at an op shop for $4. I also met a gentleman recently who has developed a financial literacy course for children. I’ll wait to check that out first before I can recommend it.
Recently a friend asked what we do about pocket money. To be honest I’m glad she asked because although we had introduced a pocket money scheme, we weren’t really good at keeping it up and it had definitely been on my mind. It got to a point where I would go, “oh yeah, it’s Friday here’s your $2…” awkward. I’m not a big fan of paying kids to do chores around the house but I’ve changed my perspective on it now after talking it out with my friends. One brilliant mum mentioned that they allocate $5 for pocket money per week. I baulked at this amount, compared to my $2, but she clarified further. “$1 goes to the tax man, $1 for housekeeping and $1 to their bank account for saving.” My aha moment. A chance to teach them not only the value of money, but how to manage it in real world terms.
So this week I made up a chores roster for the girls and told them about their new pocket money arrangement. They loved it! And my floors have never been cleaner. Hopefully we are on the right road now to making them a little more financially literate. Now I just have to learn about the stock market so they can work on a passive income. They can thank me when they’re older.
What have you taught your kids to make them financially literate?
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