5 reasons why it is important to learn how to manage our money from an early age

Awareness of savings and finances is imperative for a better and more stable future.

The Covid-19 pandemic has caused widespread disaster and exposed the weakness of our society not only on the infrastructure front, but also on a personal level. From the perspective of the health segment, the pandemic has exposed the financial weakness and constraints of society. Many have lost their jobs and had to tap into their savings to survive the pandemic. The virus exposed our lack of preparation for a rainy day. Thus, to better manage our finances in difficult times, we need better preparation in terms of education. 

Our education system prepares us to look for a job and excel in many fields, but what it does not teach us from the first years of school is how to manage money.

Let's look at some of the ways to develop a healthy mindset when it comes to financial education.

Wants and needs

The first step to educating a child about financial matters is to make him know the difference between a want and a need. Making a difference and getting him to spend on his needs and save the remaining money will help him appreciate the value of money. The harmful effects of wasteful spending must be demonstrated early in life. Parents teach healthy spending lessons by playing games like Monopoly, Cash flow, etc. with their children. These games help activate reasoning, give them valuable information about spending and help them improve their financial acumen.

Money is in limited supply

The pandemic has brought financial limitations to light. Even the biggest businesses felt the crisis during this period. An adult will have to teach his child to earn pocket money by performing simple tasks. This is an ideal way to help them develop respect for money.

The importance of budgeting and saving

Traditionally, parents did not discuss their financial situation with their children. Involving a child in the family budgeting process gives him the real picture of things and makes him aware of the goals that must be drawn for shaping a better future. Thus, the child will be more aware of every penny he will spend.

The relationship between time and money

Every child should have a piggy bank to get used to the idea of saving. Money takes time to grow. They need to be fed regularly and mixed with the fertilizer called "interest" to become a self-sustaining tree.

Investing is a life skill

Investing is now a life skill – the sooner it is learned, the more beneficial its fruits will be. As investor Warren Buffett says, "If you don't find a way to make money while you sleep, you'll be working until you die." 

Awareness of savings and finance is therefore imperative for a better and stable future.