Financial literacy simply means having the ability to manage your own money and financial affairs, according to your aims. Exactly what each person needs to know will depend on that person’s aims at their current stage of life. Are they saving up to buy a house? Then they need to understand different types of savings, budgeting, mortgages, insurance and more. Are they looking to save for a big holiday? Or are they looking at more complex topics like tax optimisation, stocks or shares and inheritance planning? These are all different levels of financial literacy.
Financial literacy for young children is likely to start with understanding what saving and spending is, and learning how to budget and prioritise spending. What do they need? What do they want? But these conversations about money are also an opportunity to introduce some of those more complex concepts, and the older they get, the more concepts they can understand. So how do we know what children are ready for in terms of financial literacy?
Here at The Hoard Book, we believe it all starts with conversations. Talk about the money decisions you make with your children, and see what questions come up. Don’t shy away from their questions – you don’t have to give them exact numbers, but instead focus on the concepts. ‘If we buy a new Playstation we will have less money for a day out on holiday. Which is more important?’
And of course you can use a subscription to The Hoard Book to teach your children about these concepts (and maybe refresh yourselves too if you need!).
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