As we live in a digital age, it is essential that parents teach their kids on how to manage online money. Picture: Freepik
While piggy banks, and pocket money are the basic tools for teaching youngsters about the value of money, the rise of digital transactions and currencies presents new challenges and opportunities for parents.
Children are growing up in homes where financial transactions are done electronically and cash is rarely used. This can pose a dilemma of how to make money tangible and understandable if it is hardly ever used in its physical form.
According to Sarah Nicholson, operations manager of JustMoney, even though we are living time when things are done digitally, the most crucial money lessons are still imparted through the actions of parents and family members.
Children learn by observing their caregivers and the people that are around so following sound money management practices in your home is a great starting point.
Nicholson suggests that at appropriate age kids can get involved in discussions about the household budgeting, saving or taking out a loan for a home renovation
“An important lesson is teaching the difference between ‘needs’ – essential items such as food and clothes – and ‘wants’, such as toys and treats,” Nicholson said.
Here are some ways to use digital tools to teach your kids about money:
– Take advantage of online money courses and workshops geared at different age groups. They use puppets, music, and story characters to make the process of learning about finances fun.
– Introduce children to online banking by letting them have a look at how payments, money transfers, and other transactions are done on your bank’s website or mobile app.
– Help your child keep track of purchases as well as understand where money goes and how much is left after spending by using simple budgeting apps or spreadsheets.
– Encourage them to save by using banking apps featuring virtual piggy banks, thermometers, or progress bars, so they can see their money grow.
– Explain fees associated with online transactions, such as service and interest charges.
– Show your child how to monitor online accounts so that they can detect unauthorised deductions or charges early.
– Help kids understand the concept of value for money by getting them involved when you search online for the best quality at the lowest price.
– Make them aware of the need to protect themselves against online fraud by discussing the use of strong passwords, not sharing financial information, and how to recognise phishing.
– Instil ethical online shopping values by encouraging responsible buying like supporting brands with strong sustainability credentials.
– Encourage entrepreneurial skills by showing your kids how to use digital tools to bring their ideas to life and generate income.
– Set up a secure online marketplace where your children can sell handmade crafts, artwork, or digital creations.
– Help them understand investing with simulated share-trading games tailored to children. They can also follow the share price of a brands that appeal them such as Disney or Nike.
– Teach children how to fundraise so they can support a cause they are passionate about. They can contribute to, or start, an online campaign on a crowdfunding platform.
– You can organise a crypto treasure hunt by taking part in an online game to unlock a digital wallet or hide your own clues around the house that will lead them to digital wallets containing small amounts of cryptocurrency.
Introduce children to the concept of currency exchange by creating a digital platform where they trade different types of virtual currencies or tokens so they can understand the factors that influence exchange rates.
IOL Business