It is said that most healthy habits start when you are young. Financial literacy is the ability to make informed money management decisions with the help of available knowledge, skills and tools. Developing sound financial decision making abilities overnight is impossible. The importance and value of money, savings, investing money in the right investment vehicles need to be adopted from a very young age.
When one receives the knowledge of financial literacy when they are young, they are more likely to always make the right financial choices because by the time they grow up, they have observed and analyzed various situations where money can be managed effectively.
Cashco Financial – We value you
Cashco Financial is one company that understands the importance of financial literacy more than others. We treat you, our clients, as people and not as numbers. Hence, we want the best for you as much as we want the best for us. Client focus is the core of our business model and nothing is more important to us than serving you the best way we possibly can. For us, it is not just about approving a loan from behind a glass wall through an intercom and then asking you to make way for the next number. We form a real relationship with you and each one of our valued clients.
We offer different types of loans – short term, long term and also cash advances. Our relationship with you doesn’t end by approving the loan. We sit with you, talk about any issue you may be facing, guide you and help you with the right choices and also provide financial literacy materials that provide tips on general money management and saving ideas.
We also understand that financial education should be mandated at all ages. Hence, along with good grades in school, understanding of the basic concepts of personal finance is important for children as well. Once a child understands the importance of not spending more than one’s earning, the habit is most likely to stay with them even when they are adults. When they face a tricky situation in the future, they can make the right decision because they have a firm grasp on money management. Financial literacy being taught to more kids could reduce the number of cases of bankruptcy and consumer debt loads.
4 ways to teach kids the importance of following the right financial habits
- There are quite a few interactive online games that can teach your child the relationship between earning money, saving money and investing money in the right schemes. They can also teach the child the importance of managing their debt and why they shouldn’t take credit beyond a certain percentage of their income.
- Teach your child the value of money. Talk to them about your family income and explain why they should always spend less than they earn. Talk to them about your debt scenario, the concepts of mortgage and how greater savings would mean that you can invest your money in income-generating investment ideas. Explain why real estate is an important investment, the difference between fixed income schemes and those which are more subject to the risks in the markets. However, don’t explain all the financial concepts and theories in one go. Try to impart financial education in small sessions. Also give them small exercises to see how much they have imbibed the knowledge and more importantly how much they can apply and relate to. Many practical financial games are available for children online.
- Give them a fixed monthly or weekly allowance and give them goals so that they can invest is small bank schemes or other schemes so that they can earn some interest on their savings. At the end of the year, see if their investments have given them some return of not. Also, reduce their allowance progressively and encourage them to start earning to make up for that gap.
- If your child’s school is not imparting financial education already, take help from a trained instructor to explain the financial concepts in a more logical and scientific manner. Also, ensure that they are comfortable with basic math and numbers.
A child learns quickly. What they learn at an impressionable age often shapes their future outlook and habits. Imparting the right financial training and knowledge would mean that they will not only have a more comfortable and cushioned life because they will avoid the pitfalls of debts and bankruptcy.