Financial literacy is a skill that needs to be developed in a child from an early age

Many families are now concerned about their financial situation and homework pros and cons. When every penny counts in the family budget, it is imperative that all family members understand the importance of money. It is still difficult for preschool children to understand what family budget is, saving, etc. But you can start small and introduce your child to the basics of financial literacy.

What is financial literacy?

The very phrase “financial literacy” sounds complicated and incomprehensible. What does it really mean? Basically, it’s a set of skills that enable people to make smart money decisions. Financial literacy means you understand how to make, save, spend and invest money. For children, financial literacy starts with making and managing small amounts of money.

Why is financial literacy important for children?
Teaching your child about the basics of financial literacy and words to describe a person from an early age can help instill in him good habits that will greatly benefit him in the future. So educate your child about money and let him ask questions. So gradually, he will begin to form the skills of the correct handling of money.

Activities to help your child develop financial literacy
In order to develop financial literacy skills in your child, it is best to use educational activities. This will give the child a first-hand experience with money and better learn their lessons. Let’s look at a few activities that you can use to do this.

Children 4-5 years old can be taught to determine the denominations of coins and banknotes. Give your child several different coins and banknotes, invite him to hold them in his hands, feel the weight, size, pay attention to the color. Name the denomination of each of them. Then offer to count a certain amount.

Take some rubber bands for money and invite your child to count the money and put it in packs (for example, each pack can be 100 hryvnia). This is a good way to teach your child to count. As a reward, you can give him a small amount.
Role-play (eg marketplace, pizzeria, etc.). The child can play the role of the seller, and you can play the role of the buyer. The task is for the child to count the money you give him for the product and give you the correct change.
Think up with your child how much certain things in the house might cost. Invite your child to calculate the cost of the item. You can complicate the task and ask him to calculate the required amount using banknotes of the same or different denominations.
Explain to your child the difference between what you want and what you need. Ask him to make a list of the things he wants. Young children can be given old magazines to cut out images of desired items. Then explain to him what the necessary things are. Put together a list of things needed to survive (water, food, clothing, shelter, etc.) and things the child wants (toys, sweets, computer games, etc.).