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Teaching kids about finances

Health & Wellbeing, House & Home, Living, Parenting

Finances, dull? Finance is everywhere! Money and finance is essential to living a full and prosperous life – and our kids will need to know the basics if they want to survive and thrive in a modern market economy. The best thing is that kids are already being exposed to financial concepts in their play – especially if they play online video games. So how do you go about teaching kids about finances without sitting them down at desks and doing boring sums? We have five exciting activities you can use to get your kids involved with financial concepts such as loans, saving, and even foreign exchange.

The daily grind: Work vs ‘Grinding’

Unless you’re a daily online gamer, the term ‘grinding’ may be foreign to you. Grinding or farming is about doing repetitive tasks to gain experience points or in-game currency to upgrade your character. There are short cuts – by paying real world money (literally known as pay to win) – and this also requires IRL (in real life) grinding; working odd jobs, helping around the house, and doing other tasks. You can inspire an entrepreneurial spirit by setting prices for chores: the more they do, they more they earn. They could start a small company offering the same to others up and down the street!

Go Google Earthing

One way to explain how foreign currencies work is to hop on to Google Earth with some play money and learn about international money transfers. Though some children might declare ‘I’m a millionaire’ when converting $100 Australian into Indonesian Rupiah – they will learn that different denominations are far from equal when trying to buy from different stores. With a VPN (virtual private network) you can look up prices in local currencies to see just how far your dollars (or ringgit, or pounds…) go.

Toy cash register teaching kids about finances

Rainy days and saving

Kids can learn about saving in stages, with the first stage focusing on the fundamentals before moving on to more advanced topics like borrowing, banking, and long-term investing. Hopefully, this will be enough to show them that restraint pays off in the long run by allowing them to go for the stars. The concept of ‘Future You’ is a valuable concept – you can spend $5 now on lollies, but what about the Future You that wants a new Fortnite Battle Pack in a couple of months? Don’t ‘force’ your kids to have the lesson – sometimes they have to make the choice and learn the hard way!

Pooling resources, interest, and finance

It’s unlikely your younger children will have enough money to open a term deposit – but you can chip in ‘bonus interest’ for each week or month they save their money. The more money they save, the more they end up with, which introduces them to the concept of compounding interest. If they have friends or siblings, they can pool together their money to buy a big-ticket item like a games console, a bike, a playset, or whatever they desire – as long as they save the money to get there.

Give them a bank account and cards

Providing young people with mobile banking options like Rooster Money and Spriggy is a valuable way to give kids insights into financial literacy. Kids may learn to manage their money, keep track of their earnings and expenditures, and gain some independence with the help of a debit card and an accompanying app for their smartphones.

 

QAGOMA

By Guest Contributor

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