Financial awareness is one of the most significant life skills, which a child must acquire at a young age; particularly in today’s quick development and great awareness in life have been examined. Additionally, the use of money is one of the basic needs of life and through money most of the needs are provided, children realize that money is essential and important in life to get things. But he doesn’t know how or how much money has to be earned. Therefore, we must teach children to treat money fairly, teach them how money is an important source of income, and teach them where the sources of money come from.
In our daily lives, one of the main problems of families is the issue of overspending and lack of financial awareness in general and among our children in particular. The U.S. Department of the Treasury, in collaboration with various research centers, conducted a study to find out the age requirement for educating a child financially. The results of their study were as follows: Children at the age of 3 to 5 years should understand four basic concepts of handling money, namely:-
First, we need money to buy things that we need.
At this age, the child must understand the true value of money and distinguish between the values of different currencies, and must learn the difference between the amounts of money.
Second: we must work to earn money.
Money does not fall from the sky. For example, a father can take his child to work twice a year, spend the whole working day with him and not allow him to spend his time playing and joking. This way helps the children to know that earning money takes a lot of mental and physical effort from us, so he feels the value of money and also appreciates his father’s need to rest at home .
Third: we must wait before buying.
If the child wants to buy something that can be postponed, we must let him know. For example, if the parents are on their way to the medic, the child wants to buy a toy. They will send too much time for it, which make them be late for their appointment, and they can’t get medicine for recovery, and the medicine is more important than buying the toy at this time, so the child realizes the value of time and money together.
Fourth, there is a difference between what we want and what we need.
The child must learn the difference between essentials and cosmetics. For example, we take the child to the market and start by asking: “What are the most important things we need? Or we ask him, “What are lacks in our house? In this way, the child begins to think rationally, understands the concept of need for something well, can organize needs according to importance and priority, and distinguish between main and secondary needs, and between what we need for the home and what he wants in particular. After buying the necessary items, we can make the child buy some of the items he wants, so we do not want to deprive him from his needs because they are very important to him.
These are the most important steps that children can learn about money at this age, which will enable him to manage some of his financial affairs on his own and under the supervision of his parents, especially if we teach our children to save money.