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Financial Independence: 7 Ways to Teach Children Financial Literacy

Life skills are equally important as academics. However, for children to live a connected and meaningful life as adults, it is crucial top preschools in Pune and other cities teach them life skills.

According to the World Health Organisation, life skills are a group of psychological competencies and interpersonal skills. Life skills help to make informed decisions, solve problems, communicate effectively, and manage finances well, among other things.

Hence, only providing students with information isn’t enough. To succeed, children need to experience and learn life skills early on to handle their daily lives in adulthood.

One such life skill that is crucial for your child is financial literacy. Did you know that financial habits and money patterns are set by elementary school or by age 7? As you make your financial decisions, and spend and save money, your child is observing your every money habit, pattern, and discussion.

Hence, don’t just rely on the information provided in schools CBSE in Pune, learn whether your child who scores 90 per cent in examinations knows money management/ financial literacy.

If you are not sure how to inculcate being financially sound in your kids, continue reading this blog.

Here are a few ways to teach financial literacy to children.

Start Early

Financial literacy is set early in a child’s life. Hence, starting early is ideal. You can start small by giving them an allowance and teaching them how to budget, spend, and save money. 

Whenever you get a chance, you can discuss money concepts. You can also use everyday situations such as grocery shopping and paying bills to teach them how money works.

Allowance and Budgeting

As said previously, providing children with a small allowance is a perfect way to teach them budgeting and managing money. This way, children early on understand the difference between needs and wants, which will help them not to make impulsive purchases.

You can help them divide their allowance into needs, wants, and savings with the help of dedicated piggy banks. They will learn how to manage money on what matters more at the time. Also developing other life skills such as making important decisions and analysing

Savings Goal

Another way to financial literacy is by creating a savings goal. Just like how it is taught in schools CBSE in Pune, a great way to teach is by making it visual and concrete.

You can help them create a goal for which they want to save up, it could be a book or toy. This will help instil delayed gratification and show them how setting money aside can lead to contentment.

Introduce Basic Banking Concepts

You can explain basic banking concepts such as savings and checking accounts. You can also take them to a bank and allow them to experience simple bank procedures such as depositing and receiving a bank statement.

Smart Spending Choices

Understanding the difference between wants and needs isn’t enough. Top preschools in Pune actively teach the concept of money. Hence, it is easier to explain how to make smart spending choices.

For example, when they want to buy a toy, they can compare the prices in different (online and offline) stores. This way, they can think critically and prioritise their goals.

Investing Basics

To be financially independent, saving isn’t enough; you also need to invest. While investments such as stocks can be difficult for children to understand, you can go through the basics.

Let them know investing is not a tool for getting rich quickly. Instead, investment helps grow your money, eventually achieving your goals and dreams.

Use Real-Life Examples

Children learn better by example. Getting involved in planning a trip or a goal to be achieved can surely give them a hands-on experience of managing money.

Now that you know the importance of financial literacy among children, find a school CBSE in Pune that focuses on teaching students life skills as such. Top preschools in Pune such as Global Indian International School (GIIS) a distinguished education hub providing students with an unconventional education system. Contact GIIS Pune to know more about how they can help instil life skills in children.

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