Children
Creating a new generation of financially-educated and responsible citizens and ensuring their future prosperity must be a priority of both our education system and personally us.
Children need to gradually understand basic concepts such as needs, desires, money, work, entrepreneurship, lending, budget, charity, savings, etc., since an early age. Saving as a concept has been proven by international studies that can be introduced to a child’s life even from the age of four.
If we want to shape a new society of financially literate citizens, our efforts must start early on.
What the kids need to know
At this age, children should begin to understand the role of money. It is also important to realize that family income may be limited and come from different sources, and that individuals have to create a budget in order to make good use of their money. Despite their young age, kids should be able to wisely use their possible pocket money, to distinguish their needs from their desires and not to be dragged by certain advertisements and the influence of their social surroundings.
Particularly, children of this age should be able to:
- Recognize the various banknotes and coins, as well as their actual purchasing value.
- Classify euro banknotes and coins based on their face value.
- Be aware that the same amount of money can be paid with different banknote and coin combinations.
- Be aware that products and services have a cost and we have to pay a certain amount of money in order to purchase them.
- Be aware that money should be kept in a safe place, such as banks.
- Recognize some of the most common currencies symbols, such as the euro (€), the dollar ($), the British pound (£) and so on.
- Count the value of their money and perform simple calculations.
- Know what change is.
It is also important to:
- Be aware that money should not be taken for granted and people are working to earn them.
- Be aware that money cannot buy some very important things in life such as feelings, values, etc..
- Understand that they should consume carefully because the money they spend cannot “come back”.
- Be able to choose the way they will manage and spend their pocket money or other small amount they may have.
- Know that there are advertisements, and that these may sometimes be “misleading”.
- Be aware of what saving is and understand its benefits, the security it offers, and the discipline that is required to achieve future goals.
What the kids need to know
At this age, in addition to the aforementioned, children should be able to know their rights and responsibilities in their daily transactions. They should understand that money can come not only from personal work, but also through borrowing or through state benefits. Moreover, they should perceive the concept of credit and the various lending methods (eg loans and credit cards) and the cost of using the credit, and in particular, the legal obligation to repay the money borrowed plus the relevant interest. At that age they should start understanding that family income may be limited and therefore household spending is directly dependent on the family’s disposable income. Subsequently, they should proceed with concepts such as quality of life, dignity, morality and charity. Finally, they should realize that the promotion of products and services as well as the peer pressure can affect their choices and consumer patterns, which in turn affect their quality of life.
More specifically, children of this age should be able to:
- Keep a simple record of personal income and expenses.
- Know what the important documents of everyday life are (e.g. certificates, identity card, passport, bank documents, accounts, etc.).
- Be aware that the price of a product should reflect its value.
- Make small purchases on their own, with their own money.
- Correctly understand the value-for-money relationship, so that they will gradually become smart consumers.
- Understand that some products have a future cost of use that is not easily perceived when buying and selling, such as the batteries for an electronic device.
- Accurately calculate the change they will get when making a transaction.
- Be aware of alternative payment methods (e.g. credit cards).
- Be aware that they can achieve money proceedings by doing chores at home or even telling the Christmas Carols.
- Be aware that there are differences in the income of each individual and each family.
- Customize their desires based on the economic reality.
Also it is important to:
- Understand that different preferences and priorities lead to different choices.
- Be aware of the role of ads and understand the messages they receive.
- Set goals that can be achieved through money saving or their parents’ support.
- Know what credit and borrowing money are, as well as the dangers involved.
- Know what the interest rate is.
- Be aware of what a bank’s operations and activities are.
- Be aware of the existence and the difference between a current account and a savings account.
- Be aware of the concept of insurance and how through it they can be protected from future risks (e.g. illness, accident, damage to property, etc.) that can lead to serious economic consequences for their families.
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