FINANCIAL LITERACY FOR KIDS _ HOW TO TEACH KIDS ABOUT MONEY _ PERSONAL FINANCE FOR KIDS.mp4

We have heard the talk that the only one single path to success and happiness is go to school, get good grades, get into a good college, graduate and get a good job, get promoted, buy a car, buy a home, etc. etc. and one day you will be happy. All these discussions finally lead to a single topic, that is money. Then why is it that the topic of money that impacts our ability to live our best lives is often avoided? Are kids taught how to manage their money at an early age? Education system doesn't talk about these topics. To teach them about personal finance, you don't need to wait until they graduate or start earning. Education in personal finance is an essential life skill that every kid needs irrespective of their chosen profession. As quoted by Warren Buffett, sometimes parents wait until their kids are in their teens before they start talking about managing money when they could be starting when their kids are Researchers have noted that 80% of our brain growth happens by age 3. Studies found that kids are already able to grasp basic money concepts between the ages of 3 and 4. And by age 7, basic concepts relating to future financial behaviours will typically have been developed. Kids are exposed to money matters from a very young age, so why not help them understand it and develop healthy habits early on? Most parents already know how important it is to teach their kids about money and how to manage it properly. But there's a huge difference between knowing and taking action. There are plenty of common expressions related to money that mislead the children. Few of them are, money doesn't buy happiness is a common expression that has been around for centuries. That is correct, money is not everything and it's hard to define happiness, but not having money will make your life unhappy and miserable. Money is the root of all evil is the biggest lie ever sold to people. Regardless, the phrase money is the root of all evil has only led more people to subconsciously stay away from anything related to personal finance. Stop treating money as a taboo topic and start talking. Common misbelief is that it might be a waste of time to teach children about money management when they don't have any of their own. Kids' early interactions with money will likely involve spending. You can explain to children that spending isn't as easy as tapping that card everywhere you go. It takes hard work to earn money. Help kids learn to make smart spending decisions. Before they can manage their money responsibly, you'll need to teach them that there's a significant difference between wants and needs. Separate needs from wants. Bring them with you while shopping and let them understand how to pick quality products for better prices. Teaching kids about what things cost, how to differentiate between price and value. Kids have no idea what things cost, price is meaningless to them. When they're very young, there's no difference to them between the cost of a candy bar and the cost of a video game. To take things one step further, there's no difference to them between a low-priced video game and a high-priced one. Understanding this distinction while kids are young will help them make good decisions on how to spend their money when they're older. It's important to teach them from an early age that money isn't just for spending, they should be saving money regularly too. Save more than you spend and don't go into debt. Kids need to understand how compounding works for them and against them. Learning to save isn't just an essential money habit. Saving teaches discipline and delayed gratification. Saving teaches goal setting and planning and it builds security and independence. Teach them the significance of an emergency fund. Bargaining is an act that can help to bring down the price of a product while spending. However, teach the kids that bargaining with wrong people to save more is not a good technique. Teach them how a credit card works. Credit card rewards are great but the most important thing is they understand the potential dangers. Teach them the basic principles of insurance. The general rule is if you can't afford to replace it, insure it. Kids need to know that. Most importantly, they need to learn when they need each type of insurance. Saving money is a great habit but if you want your kids to learn how to truly build wealth, teach them about investing. It can be done through inspirational stories of legendary investors like Warren Buffett who first brought stock at age 11 and first filed taxes at age 13. Animated series Warren Buffett's Secret Millionaires Club offering tips to kids on making investing an enjoyable activity. This animated series that features Warren Buffett as a mentor to a group of entrepreneurial kids whose adventures lead them to encounter financial and business problems to solve. The cartoon teaches the basics of good financial decision making. Kids will learn practical and valuable lessons about money management and can easily relate to the easygoing and fun animated series. In a story format, you can introduce them to the personal finance classics like Rich Dad, Poor Dad, The Richest Man in Babylon and many more valuable books. These books will really motivate them to want to invest and spend less than they earn. They need to know the basics of stocks, bonds and real estate etc. before a salesman explains these concepts to them. When today's world is all about instant gratification, we need to teach them that delaying gratification leads them to enjoy the anticipation of greater reward while working and waiting for it. It helps to bring about dedication, self-control and self-discipline at an earlier age, thus making them better human beings and prudent financial investors. Show kids the value of giving If you value giving to others, you can instill that value in your children by helping make it a habit for them at an early age. When you have more income, you can share more through giving, so there is nothing wrong in wanting to get rich. Research suggests that when people can financially give to others, they are happier than if they had spent the money on themselves. By teaching your children the value of giving rather than receiving, you are instilling in them a sense of pride and self-esteem, character traits that will take them far as they grow. It is often seen that a person who is financially secure, works more efficiently, grows faster and excels in career and lives a stress-free life because then the motivation to work doesn't come from a place of necessity but by choice. It's not how much you make, but what you do with what you make that makes a difference. Instilling healthy financial habits in your kids is one of the most important things you can do to help ensure they have a successful future. The best way to teach your child about finances is to act as a role model. Actions speak louder than words and your child is absorbing everything that you do. Ultimately, the truth is that money impacts all of us. Unless we control money, money will control us. Thank you for watching.