Although saving is a part of money education, it isn’t the only one. According to experts, money education is all about education which teaches one how to use money. Experts say that if money education is provided to children and youth from the right age, that it will help to build their future, when they become adults.
What is money education?
Psychoanalyst Dr Ganga Pathak says that money education or money management, teaches the young to save money. It also gives them the knowledge on how to spend their money, to keep records and calculations.
Experts comment that the current generation has a lot of excuses for spending money. “If we are to give money education to individuals from an early age, management of money will become an easy task for youths,” says Dr Pathak. The lack of money education from an early age has led to the young people today, not being able to perform even simple tasks such as filling up an application form of a bank, she adds.
Dr Pathak says that guardians have to guide their children about money education so that they become youths who are responsible about their money. “The parents of one of my patients celebrated my patient’s fifth birthday in a lavish hotel,” Dr Pathak gives an example. “When my patient was ten-years-old, his father’s business was not doing well, so they didn’t celebrate his birthday then. The child was also shifted from a private school to a public one. This had a negative impact on my patient and today, he’s going through depression,” she continues.
Just like other forms of education, money education is also crucial. Pathak shares that it’s important that youth learn to value money, to know that spending comes from earning and that money doesn’t grow on trees. Pathak also suggests that parents should also not set examples of lavish spending for their children.
How to begin money education?
Krishna Sundari Shrestha, child expert as well as the Vice President of CWIN, an organization which works for the welfare of children and the youth in Nepal, says that money education should be imparted from the time when a child is taught to add or subtract two numbers.
“To teach children the value of money, they should be taught to save money in a piggy bank,” she says.
Normally, as a child, one learns to identify money from the age of two and a half years. Just like mobile phones and remote controls, a child begins to learn that money is also important. They will also try to get money for themselves. Shrestha of CWIN says that parents should teach their children the importance of money through stories and games.
She further says that it’s important to provide young people with pocket money, every week. They should be taught that with the pocket money, they can buy things that they like and want as well as also save the rest that is left.
In foreign countries, says Shrestha, some parents take their children to their workplace for a day so that the children can learn that money comes in from hard work. Also, nowadays, there are facilities for children’s account in banks. “Savings accounts can be started for an individual, from the very next day that he or she is born. Hence, opening a bank account ensures security of the future, along with teaching children, the habit of saving,” she says.
For 5 to 10 years old
According to psychologist Dr Ain Bahadur Shrestha, at the age of five, 90% of the child’s brain is already developed. Hence, it would be fruitful to teach money education to kids at this age. Apart from parents and guardians, Dr Shrestha also suggests that schools should also take on the responsibility of imparting money education. He says that at this age, children are fond of collecting money, especially coins. “Apart from giving children piggy banks, parents should also set a target for their children, to collect a certain amount within a week,” he says.
To get children to understand that money can only be earned through work, children at this age should also be encouraged to work. According to Dr Shrestha, children should be encouraged to do small household chores such as making their own beds and cleaning their room and some money incentive should be given to them.
For 10 to 14 years old
Psychologist Shrestha further advices, “Rather than giving children this age piggy banks, they should be given access to bank accounts. Also, guardians should thoroughly teach their young adults about spending, investments and savings at this stage.”
Since the needs of children increase as they become older, it’s important to increase the weekly allowance accordingly, says Shrestha who also believes that the habit of charity should also be taught from this age. To do this, parents should involve children in charitable acts such as donating money.
For 14 to 18 years old
Teenagers want to be independent. However, because they have to be dependent on their parents financially, they aren’t able to do anything on their own. Dr Shrestha says that at this age, teenagers should be familiarized with concepts of saving and investment. Opening a bank account familiarizing teenagers with debit and prepaid credit cards is also a good idea, at this age.
To give teenagers financial independence, they should be encouraged to take on part time jobs, shares Dr Shrestha.
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