Unfortunately, financial education is not included decisively in most children’s curricula. As a result, the parents are usually responsible for passing on our financial knowledge. And this is not at all easy.
First of all, it must be taken into account that, except in exceptional cases, the financial culture with which we face adolescence and youth is very scarce. So little that we are unaware of basic principles such as the use of financing points, interest, commissions, financial costs, etc.
And, of course, no great interest is given to the key issue in financial education: saving and expense management.
How to start financial literacy education
Although not all specialists agree on the age at which to start doing so, it is practically unanimous that giving a regular allowance to the child is the beginning of a good financial education.
No matter the amount, it is not a question of offering a grant or a salary. It is about establishing the relationship between income, expenditure, and the absence of income.
This is because the first impulse when receiving money is to spend. Suppose income is regular and no advances or deliveries are made outside the agreed deadlines. In that case, a first basic financial lesson is provided: you cannot spend more than what you receive, and you must manage what you have received.
If this first step has been achieved and is not easy, a second, more complex phase could begin, in which savings and good money practices should be encouraged.
How to encourage savings
Nowadays, bank savings accounts for children hardly produce any profitability. So, what was once a more or less interesting tool, today in any case, is no more than something anecdotal and with some advantages in discounts and little else.
Therefore, once again, it is in the home environment where we must begin the difficult task of helping to encourage the habit of saving.
An interesting formula, which can serve as a base idea on which to elaborate the practice of each one, is to exercise a sort of banking figure of term deposit so that the functioning of savings is valued.
To do so would be as simple as proposing to the child that he will set an amount aside from his allowance, which will not be given to him but will be returned to him monthly, plus interest. Now is a great time to explain how interest works and the importance of saving to achieve goals. You will obtain a greater amount of money for having had the patience and the habit of saving, with which you will be able to manage your small economy even better.