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How To Build a Strong Financial Foundation For Your Child - Family Bank Limited, Kenya

Financial literacy for children is an essential skill that equips them for life. It gives them the necessary tools to make informed financial decisions later in life. This is how you can build a strong financial foundation for your child.

Begin as early as possible.

Teaching children about finances should start as soon as they are able to understand some of the financial concepts like savings, budgeting and wise spending. This should be explained in the simplest way possible so as to ensure that they really understand what these terms mean in relation to the value of money. The aim is to avoid complicating concepts or overwhelming them with a lot of unnecessary information. Everyday concepts such as pocket money or shopping will help them contextualize the financial information they learn and be able to apply them in real life situations.

Foster a giving back culture.

It is important to teach children that the value of money goes beyond its purchasing power. Teaching children the importance of giving back will help them develop a sense of responsibility, generosity and empathy. It is also a lesson that goes beyond the value of money and challenges them about their role in the society and making societal change. This will help them learn about philanthropy through donations, voluntary work and community service.

Set financial and savings goals.

It is important to teach children the importance of financial and savings goals for their financial future. It will help them learn about short-term and long-term financial goals. This can be done through encouraging them to save for things that they want like toys, books and bicycles. It will also help instill the principles of wise spending, delayed gratification and thoughtful decision making. Parents and guardians can also encourage a savings culture through getting piggy banks or opening a savings bank account for their children where they can save money towards their goals.

Teach them the value of money.

Children should know that money is earned through hard work and determination. This can be taught by creating a system where they do small manageable tasks around the house for a small fee. This will help them appreciate the value of money more and view it as something that has to be earned. It will also be an important lesson towards financial independence where they will learn that money can only be earned through hard work.

Financial literacy for children is all about preparing them for future financial independence. It introduces them to the value of money and how it can be used to support their goals and dreams. It also sets a strong foundation for their future financial independence and financial security.