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Elementary school is a fantastic time to teach children the importance and value of earning and saving money. Begin using money as a means of teaching when toddlers first learn how to count, allow children to run their own lemonade stand and yard sales during the summer, enforce good saving and spending habits with allowance, and begin explaining price differences during grocery store trips.
Providing children with a thorough understanding of financial literacy at an early age, is vital to ensure proper money management skills later in life. Setting a realistic budget, responsibly managing credit and debt, saving for unexpected expenses, and learning how to invest will all be important life skills for every young adult to master.
Unfortunately, there are many students who enter into adulthood without entirely understanding how to manage their finances properly. Financial literacy is defined as a “meaning-making process”, in which individuals use acquired skills, external resources, and contextual knowledge to accurately process information and make competent decisions in regards to potential consequences of their financial decisions. Although there are lessons to be learned from trial and error, financial literacy is about managing finances proactively and with intention.
For adults or college-age students, improvements of financial literacy can be made by educating yourself through reading books about saving money and setting financial goals, asking for guidance from a financial counselor, taking classes within your local community, or finding online resources which provide tools and assistance to help make good financial decisions. Unfortunately for children and young students, financial literacy is often left out of the typical education system’s curriculum. Parents and guardians become the primary educators when it comes to teaching children the money management skills which will allow for a strong foundation of lasting financial competence.