Impact of the financial situation on health
Scientists have found that people experiencing financial hardship, financial stress and debt also report symptoms of depression, anxiety and anger. And age does not matter in this case. According to a survey of 8,400 young people aged 24 to 32, the presence of credit debts has been a significant factor affecting health deterioration. Even at such a young age, there was a direct link between the presence of debt, high blood pressure and symptoms of depression.
Experts believe that financial literacy training should start at home as early as preschool age. Alas, many parents prefer not to discuss monetary issues with their children so as not to worry them or because of concerns about their own financial health. But whatever your financial history, you can teach your children about financial literacy and practice it. Studies show that financial-socialized children (e.g. those who have a savings account since they were children) show good financial habits and have savings, not only in a bank account, when they become adults.
Parents who teach children how to handle money bring up financially responsible adults who are confident and prepared for economic hardship at different times in their lives.
Financial literacy in practice
Below are tips to help teach children financial literacy.
- Pay in cash, not with a credit card.
With the distribution of credit cards that provide bonuses and cache back, it is easier and more preferable to pay with a credit card than with cash. Alas, spending more than the right amount of credit card is much easier even for an adult, and children using a credit card, it is difficult to understand the concept of budget planning. Little children can decide that with a magic card they can buy anything they want! Use cash as often as you can - it teaches you how to handle money properly.
Children understand the real cost of things and learn to spend money responsibly.
- Teach your children financial concepts according to their age.
Teaching about financial responsibility lasts a lifetime and ideally begins in childhood. To make these lessons interesting and useful for your child, teach them according to their age. Repetition also helps to learn financial literacy lessons. Apply the principles of money management in practice as often as possible. Our table tells you what to do and when to teach your children.
- Let us know that money does not grow on trees.
We, adults, know that you can't buy everything you want. But most children don't even have to dream about anything, because they already get toys and gadgets that they ask for. Show children the value of money and teach them how to plan their budgets by simply saying no to the demand for toys, clothes and gadgets. Just say, "This week we don't have the money to do it," to help children take responsibility for their finances.
- Allocate the cash allowance and watch how children spend the money.
Let children decide where to spend the money, but still, we need to establish certain rules for children to learn financial literacy and watch how the money is used. For example, learn how to save for the future: demand that children save a certain amount of money every week to study. Or help to understand the concept of budget planning by encouraging the child to save for a large purchase, such as a bicycle.
- Save money for the whole family.
Learning how to save is an essential skill for achieving and maintaining financial independence. Since most of us use e-banking and an automatic deduction system to save money and transfer it to an investment account, we have learned how to postpone it, and it is even more difficult to explain it to children. Make the savings process more transparent: make a special jar and save for the whole family. Choose a common goal for the savings - for example, a trip to an entertainment centre.
- Read the available financial literature.
Read books that teach you how to handle money together. To support your child's curiosity, choose stories with interesting characters.
- Use online financial literacy classes.
When it comes to teaching financial literacy, there is no point in reinventing the wheel: use the lessons of financial experts who teach children.
- Play financial games.
Board games are a great way to teach children financial concepts in a fun and understandable way. Classic games - Monopoly, Monopoly Junior, Game for Life - teach such concepts as investment, income and budget planning.