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FINANCIAL LITERACY FOR CHILDREN: HOW TO START?

Children generally start noticing their parents and people around them using the money to buy 'stuff' close to the age of three. However, since they are not taught much about it explicitly, their knowledge about the same remains limited. While most schools teach the concept of numbers and letters thoroughly, they hardly consider teaching finances to young learners. And considering the fact that finances are something that every single one of us has to deal with in some part of our lives, it becomes extremely important to start educating children about the same so that they make smart financial choices as they grow up.

If children are not made financially literate, there are chances that they might grow up with some wrong notions in their heads. For example, if they hear someone saying that he is lucky because he is rich, they might end up thinking that richness is a factor governed by luck alone and one doesn't have to 'earn' money to become rich. However, when children are brought up in an environment where everyone talks about the concepts of money, investments, debts, credits, savings and much more, they feel familiar with the concept of finances and understand them better.

But with so many complicated concepts that sometimes adults themselves don't understand, how does one start teaching them to children?

The best way to start teaching children about financial literacy is to start by explaining to them what 'money' actually is. Tell them about the barter system. Of how people in the old times used to exchange goods in exchange for goods. Like a farmer would trade 5kgs to wheat with a trader in exchange for a few clothing items. Or a butcher would trade eggs with a milkman for milk. Ask them if it would always be possible and feasible to carry around 5 kgs of wheat or clothes or eggs and cans of milk everywhere one went. Question if they think a milkman would trade his milk for eggs that have gone bad or are broken and if a farmer would trade his wheat for torn clothes with the trader. Inform them that money was created to get over such problems- to create a common and easier method to buy or sell goods.

The second step is to teach children about the basics of numbers and currency. Teach them the various denominations of coins and notes available in India. Of how 100 one rupee coins, 50 two rupees coins, 20 five rupees coins, 10 ten rupees coin or notes, 5 twenty rupees notes or 2 fifty rupees notes are all equal to 1 hundred rupees notes.

Financial literacy is like any other subject. You make children familiar with the bigger concepts one step at a time by making them comfortable with the basics. This is how DY Patil Dnyanshanti School teaches all its students; we make sure that the basics are clear so that they end up understanding the bigger and harder concepts in a better way. Enroll your child at DYPDSS today so that they not only learn but understand!

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