School imparts knowledge in various important areas, but ask yourself one question: did it teach you how to manage your own finances? Unfortunately, little has changed in this regard over the years, so children's financial education rests primarily on the shoulders of parents. See what you need to know.
Financial education for children – what you need to know:
- Early financial education is key. It's important to teach children about money from a young age through play and daily observation, and then continue learning throughout school and adolescence. This helps them develop good habits before bad ones develop.
- It is worth teaching children to save instead of consume. Early financial lessons teach children responsibility, patience, and independence. They help them understand that money is a tool for achieving goals and dreams, not just for impulsive purchases.
- Parents are key teachers. The best way to teach financial literacy is by setting a good example. Have open conversations about money, create shopping lists, demonstrate how to pay bills, and discuss family financial goals.
- Use practical tools. Pocket money, preferably in digital form, such as an NFC wristband, is an excellent tool for learning budget management. Financial apps and games for children, such as Nasz Bank Junior, further support learning in an engaging way.
Why is financial education for children so important?
Although many argue that money does not bring happiness, it plays a very important role in everyday life and it is worth building a healthy attitude towards it from an early age. Development experts suggest that this process should be started as early as possible and then continued until adulthood or even beyond.
Why is financial education for children and young people so important? Learning to manage finances wisely can bring many benefits into adulthood, including:
- an attitude towards saving instead of consumerism,
- responsibility and independence,
- patience and perseverance,
- a sense of security and lack of fear of unexpected situations,
- lower debt risk,
- development of analytical competences, valued on the labor market,
- using money as a means to achieve goals and dreams.
When to start teaching your child about finances?
The sooner you start teaching your child about money management, the better. Why? Preschool-age children (ages 3-6) are incredibly curious, and their brains absorb new information like a sponge. Furthermore, they're still at the stage where they learn from observing and imitating their surroundings. Important lessons can therefore be easily conveyed through play – in a light and enjoyable way, such as allowing a child to pay for their purchases at the cashier or playing shop with them.
As a child begins school (ages 7-12), their needs begin to increase, so they might need some pocket money. They might want to go to the movies with their peers, go on a school trip, or have a cool game they saw at a friend's. This is a good time to show them that consumerism isn't always profitable, and that it's worth waiting patiently for good things. If he doesn't spend his pocket money now but saves it, in a year he will have not just one toy, but, for example, an entire console that he will enjoy much more.
In the case of young people (13-18 years old), it is worth going beyond the classic saving in a piggy bank and start familiarizing yourself with banking products. This is a good time to set up a separate account for your child and show them in practice the mechanisms behind deposits, savings accounts and loans. Although there is still a lot of time until the first mortgage loan for the dream home, it will make it easier for him to navigate the maze of bank offers and recognize the most advantageous ones.
What are the benefits of early financial education for children?
The final decision on when to start teaching a child about finances rests with the parents. However, if you decide to do this early, you can prevent it from becoming just another thing to learn and forget. Over time, it will develop into a habit that comes naturally and almost unnoticed. The desired norms regarding saving and budgeting will turn out to be something normal and natural that does not require additional thought or special preparation – it is simply "this is what you have to do to not worry about money."
It's also worth remembering that financial education for children is a slow and gradual process, so mistakes can be made, especially at the beginning. If a child is a few years old when they first start saving, the potential loss will be relatively small. However, if it's a teenager or young adult just starting to learn responsibility, a mistake or giving in to temptation will likely be much more costly.
In this case, it will also take more effort to eliminate bad habits, such as spending every penny of your money without leaving anything for later. This problem occurs in preschoolers, who are a "blank slate" in this respect - it is you who decides which behavioral patterns will develop in them and which ones you will correct before they become ingrained in the young person.
Examples of practical activities
Financial education for children is a phrase that may sound lofty, but behind it lies standard everyday reality. As a parent, you are an authority for them, so they observe you in various situations and thus learn how to cope with them. Think about how much you can do, for example, by:
- open conversation about financial issues instead of labeling them as something shameful,
- making a shopping list and avoiding spontaneous temptations when you are in the store,
- showing your child how to pay bills and how much things they take for granted, such as water, electricity or the Internet, cost,
- discussing family financial goals with your child, such as a vacation to a beautiful location or a car that will be more comfortable than the current one.
On the other hand, it's worth remembering that finances are a highly stressful topic for many adults who didn't receive such support during childhood. If you're in this situation, try to avoid presenting money in a negative context, such as "something is too expensive." It could also be presented as "something we need to save for." Although the change seems subtle, a different message will be encoded in the child's brain - having orderly finances is not something unattainable, but requires a proper plan, and it can be done.
Is implementing financial education difficult for a parent?
Between work, home, and other commitments, don't you have much free time to spend with your child learning? Or perhaps you're not confident in your role as a teacher and afraid it will do more harm than good? Don't worry, financial education for children and young people is easier than you might think. What's more, the internet offers a range of effective tools to support you.
Available tools to support parents
Regardless of a child's age, it is best to teach them through practice, and pocket money is an excellent way to do this – in an amount tailored to individual needs and age. This is the first budget they'll manage, providing them with a safe space to make mistakes. By drawing conclusions from these mistakes and relying on their parents' advice, they'll learn the mechanics of effective saving, which is the foundation of financial education.
Just remember that pocket money doesn't have to be cash put into your child's wallet. Keeping up with the times, it is worth opting for something more modern, such as an NFC wristband with a debit card attached (yours or one specially designed for your child). This allows young people to freely pay for their own expenses and experiment on their own terms, while you discreetly keep an eye on their progress and check their transaction history in the banking app. Both parties benefit greatly from choosing this solution.
For younger children, various websites and apps with interactive games that present the world of personal finance in an interesting and engaging way also prove helpful. Parents positively rate titles such as Nasz Bank Junior, although you can also find something worth considering on various bank websites.
FAQ - frequently asked questions
When is the best time to start teaching children about money and saving?
The best time is preschool (ages 3-6), when children are curious about the world and absorb knowledge. You can start with simple things like playing shop or handing cash to the cashier. This way, money ceases to be a taboo topic and becomes a natural part of everyday life.
What are some specific examples of activities that will help parents teach their children about finances at home?
Open conversations about money are important, including making shopping lists together, sharing household bills (electricity, water), and setting family financial goals. This way, children see that managing a budget is a natural part of life, not something stressful.
Is cash a better solution for pocket money, or perhaps modern tools like an NFC wristband for children?
Modern tools such as NFC wristband with a linked debit card, are an increasingly better option. They teach children about digital payments and allow them to spend money freely under the discreet supervision of parents, who can track transaction history in the banking app.
What financial mistakes do parents make that can negatively impact their children's education?
Negative attitude towards money, e.g. saying that something is too expensive, instead we have to save for this, can cause anxiety in a child. It's important to avoid a stressful tone when discussing finances and teach children that planning and saving are the path to realizing their dreams.