The challenge for this month is introducing financial literacy to children. What is financial literacy? Financial literacy is the education and understanding of knowing how money is made, spent, and saved, as well as the skills and ability to use financial resources to make decisions. These decisions include how to generate, invest, spend, and save money.
If we relate financial literacy to spiritual quotient, money is one small part of sustenance from God. Thus, by mastering financial literacy, basically we are being responsible for the sustenance that God gives to us. This concept is important and I think it needs to be the basic step in introducing financial literacy to children.
The Importance of Financial Literacy in Children
Ok, financial literacy is important. But why do we need to introduce it so early in children? Just like practical life skill set, financial literacy needs to be introduce early as it is an important skill in adulting.
"If youngsters learn how to spend wisely and delay gratification, they will develop patience and planning skills in other aspects of their lives." - Janet Bodnar, author of Dollars & Sense for Kids.
One expert suggested that kids can start to learn about money as soon as they're old enough to know not to put it in their mouth—you know your child better than anyone, so you know when you can start. Another source suggests to start to introduce financial literacy at 5 year old as five- and 6-year-olds are starting to develop the cognitive skills necessary to understand basic monetary concepts, such as identifying coins, figuring out how to count change, and matching small amounts of money to items they want to buy.
Stimulating Financial Literacy
There are many activities that can be done to stimulate financial literacy. As what I have read so far, most articles focused on older children and almost none writes about introducing financial literacy to toddlers. However, I found a good article on how the activities are sorted based on different age groups. Although the youngest age described is 2-years-old, I think I can modify the activities to my 15-months-old baby.
So, my plan is:
- Introducing coins - shape, material, weight
- Introducing piggy bank saving - put coins into piggy bank
- Introduce notes - colours and shapes
- Introducing bank situation - trip to a bank
- Introducing banking service - how to deposit a cheque
- Introducing ATM activity - how to withdraw/ deposit money
- Introducing market concept (buying & selling goods) - grocery shopping
- Introducing Market concept (buying & selling goods) - eating out
- Introducing Market concept (buying & selling service) - playing arcade
- Donation - put money into donation box
- Donation - give money to the needy
Let's see how it goes. See you in my following posts!