The three basic human needs are defined as food, clothing, and shelter, and all these things cost money. It’s a universal language, and no matter where you go in today’s world, you need to have an understanding of how money works in order to secure products and services. It’s very important for kids (who might just think money comes from their parents’ wallets and the ATM) to learn about money, and an understanding of the following five concepts is key as they explore the topic.
Being able to assess how much they have, what they want, and using control techniques to work towards a goal, is a necessary skill to maintain control of one’s finances.
Children should have a clear understanding of the dangers of getting into debt, but also, how to get out of it. They should know that while it is something to avoid, if they find themselves in debt, it is not the end of the world, and there are ways to get back on track.
Is one cookie worth the same as an entire cake? Even when children understand that money is exchanged for goods and services, they might not understand just HOW much should be exchanged. Allow them to compare and understand the value of different items.
4. Exchange Rates
Different countries use different currency, and while a dollar may buy one thing in your country, another country’s dollar may buy three of those things. Showing pictures of the different currencies and where they are used should be a later topic, but is an important one nonetheless.
5. History and Use
“Who made the first money?” “Whyis it square?” These are the kinds of question an inquisitive mind throws at you when you bring up a topic as complex as money. Be sure to have some cool facts on hand to keep your kid’s interest while you discuss it.
Visit INSYL for illustrated children’s books that help your child further explore and understand the concept of financial responsibility.