Appropriate for children aged 7-13.
In this age group, your children will start to handle some pocket money, and this offers a good chance for you to start introducing simple financial concepts and knowledge to them.
As financial education is not formally taught in schools, imparting this skill to your children early could invaluably impact how they view money. Exposing your children to the three main aspects of financial literacy – saving; investing; and protection – from a young age will have a positive impact on their long-term finances when they grow older.
You can introduce the concept of saving by getting your child to put away a portion of his or her allowance to be able to afford an expensive toy or game that he or she has been eyeing. Throughout the saving journey, your child will have to make hard decisions to diligently put away money and resist the temptation of using it early. When they start working, this will help them understand the importance of delayed gratification.
Teaching your child the ropes of investing does not have to be mundane either, as you can read up or reference a sport or snack that the family enjoys. You can start to introduce the concept of a company, competitors, revenue, costs and profits. These are fundamental things to note when making stock investments.
What’s more, you can do your own research or joint research online, and come together to present findings and discuss why a company would or would not make a good investment. Aside from the fact that 40 per cent of respondents in a local survey said that engaging in online activities together enhanced family life3, this equips your children with the ability to observe, deduce and explain why they thought an investment would be good.
Financial protection is the most advanced concept to teach your child. You can start by explaining that insurance works to protect people and the value of things. If you have already introduced your child to savings and he or she has bought a new toy, use that as an example. Ask your child how unhappy he or she would be if they lost it, and whether they would be willing to fork out a small percentage of the cost of that toy to ensure you would buy them a new one if anything happened to it.