Once a kid understands what to do with money given to him/her, that is the right time to start putting the child through financial literacy.
At a certain age, mostly when children hit the stage of puberty, they want to spend the money given to them by their parents on so many irrelevant things.
It is therefore parents’ duty to monitor how their kids spend their money to prevent them from poor spending habits.
Teaching your kids how to manage and spend money does not require a degree in finance, instead, financial literacy starts by teaching these five money lessons.
1. Tell them the difference between wants and needs
Financial literacy starts with one’s ability to differentiate between needs and wants, ie, what is necessary to have and what is nice to have.
Parents spend their money on such needs as food, shelter and medicine while wants as toys and vacations are spent money on only when the needs have been met.
So, as a parent, your child should be able to understand what is important to spend his money on, his basic understanding of the concept of needs and wants will always guide his spending.
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