It is better not to confine your child within the periphery of toys only. Instead, let him explore another world of currency. Days are gone when parents do not want to involve their children in financial matters. This is because parents do not want their children to get acquainted with monetary issues.
Now things have become changed, and we are becoming smarter than before. Therefore, there is no question of carrying on those taboos. Moreover, it has been observed that if you make your child acquainted with monetary matters, then it will become helpful for his future.
For this reason, let your child know more about monetary matters so that he will not face financial crises just like others. Financial literacy for children comes one by one. Suppose you may need to borrow from taking loans for bad credit with no guarantor on benefits. Therefore, if you want to teach your 5-year-old child about borrowing, then it will be an act of foolery.
Here we will discuss by each age group and what financial knowledge a child should gain.
It is just the beginning of his life. Therefore, there is no use in telling something that is not useful for them. Instead, try to make your child learn about different types of currencies available in his country. Show him various pounds, Euros, etc. Ensure whether he can memorize the entire knowledge.
Besides, you may turn the entire thing a bit interesting by introducing a game. Start playing with your child coin identification games. Keep different types of coins and in front of him and tell him to identify one. Take part in this game with your child.
Apart from that, you may also make the entire play more interesting by imagining a game. For example, you may become the buyer, and your child is a shopkeeper. When you come to buy things from him, both of you need to exchange money. This will better make him understand that to purchase anything. He needs to pay money.
To make your four years children acquainted with money, you may take help from preschool. Ask the teachers to help you out by providing a clipped coupon. Now, you have to take him to the superstore and hand them that coupon.
You need to tell your child to purchase some products. Keep an eye on him. Afterward, you need to check what he has bought. This is the only way to make him understand what is necessary and what is not. Definitely, on the very first day, he will not be able to find out the valuable thing on his own.
However, day by day, he will come to learn how to make the best use of money. However, even preschools also do this activity in restaurants. Sometimes it is imaginary, and sometimes it happens in reality.
At this age, you may want to give some pocket money to your children. It may be a nominal amount, or it may be a good amount. There is hardly any matter. What matters the most is how your child is spending that money.
From the very initial age, if you make him learn to save money, it will remain for a long time. So, when you consider him eligible for pocket money, try to gift him a piggy bank. Ask him to save money in that bank.
At the end of every year, tell him to break the bank and count all the money. Suppose in total it has become 100 Pounds. Now you add 5 pounds more to that fund. When he asks why adding such an amount, tell him that it is the interest amount for saving money long one year.
In this way, you can inspire him to save money and make him understand the concept of a savings account in a bank.
Perhaps it may seem that financial literacy will come up in him automatically, but it is wrong. This is because financial literacy is something that should be learned properly. Being a parent, when you will teach him, it will become concrete knowledge.
After 9-12 years, you may make him learn about the benefits of borrowing money. Give him real-life instances of you. Tell the fact of taking loans for people on benefits from direct lenders. When and how he should borrow money and how to repay so that it will not make him a defaulter. In this way, you may be literate your child financially literate. It is utterly essential because improper financial knowledge can lead to harmful decisions.