According to the 2022 National Financial Literacy Survey, approximately 69% of adults in Trinidad and Tobago are financially literate. While this is good news, adults still suffer from poor money management skills and making bad financial decisions.

Now, most parents inculcate in their children the values of honesty, kindness and being hardworking, but do they ensure that their children have a solid financial future

As a parent, you can shape your child’s relationship with money. Therefore, it is important to teach your child the purpose and value of money as their future depends on it. Raising your kids to be smart with money gives them vital life skills.

It is time for your financial and personal aspirations for your kids to aim high. It is time to begin focusing on financial literacy and teaching your kids about money and investments.

In this blog, we are going to look at 6 ways you can teach younger children and teenagers some important skills in financial literacy.

1. Talk to your kids about money – show them where it goes

You actually do not need to be an expert to teach kids about money. You can use everyday moments, for instance, when you are at home or at the grocery or even paying a bill, start a conversation about money. Talk to your children about what you are doing and explain the concept of exchanging money for goods or services. By doing this, you make money part of everyday life.

You can talk to your children about how you earn money, how you use that money to cover the essentials like food, clothes and housing. You can talk about the concept of needs versus wants, the must-haves and nice-to-haves and encourage your children to think about these needs and wants before spending money. You can also show them how to track their spending to see where their money is going.

For teenagers, you will need to strike a balance between talking to them about how they spend their money and allowing them to make their own mistakes because teenagers usually have their own money to spend. If they make a money mistake though, do not get upset with them. Instead, talk about their decision and how a better decision could have been taken.  

2. Get kids involved in money decisions

You can start doing the family budget with your children. Explain to children how much money you have each week and how you spend and save it. That way, they will start to get a sense of the cost of living and how long it takes to save.

Also, if your children are earning money, help them create their own budget. While they do this, encourage your children to donate some of their savings to a charity of their choice. This teaches them you can use money for more than just buying things. Talk about how good it feels to help others.

3. Give kids pocket money/allowance

Having an allowance or some pocket money can help your kids to understand the value of money. Earning some money through chores or other activities teaches kids that they only get paid when work has been done to a certain standard.

You can choose to pay them for certain tasks, such as cleaning the house or yard or washing the car.

4. Encourage your kids to save – it is an essential money skill

Many adults struggle with saving, so it is definitely an important topic for younger children! So, what you need to do is introduce the concept of delayed gratification, letting children know that we do not always have to have everything we want right away.

You can also introduce a piggybank, which is great for getting younger children into the practice of saving coins and notes. They can see their money grow as they save.

You can discuss saving in more concrete terms with teenagers. Discuss budgeting more generally and advise them to save 20% or 30% of their allowance each month. You can even create incentives. For example, if they save 20% or 30% of their allowance, you will match this amount. Together you can even set a financial target for them to work towards.

You can also teach them about banking by opening a savings account or giving them access to an account you opened when they were younger. This is a good way to introduce kids to banking, saving and interest.

Help your kids avoid impulse buys by teaching them to set goals and prioritise how they spend their money. When your child wants to make an impulse buy, remind them about the goal they are saving towards. Get them to work out how much longer it will take to reach their goal if they spend today.

5. Active Learning is a great teacher too

Games are a great way to teach children of all ages about money. For children learning to count, add or subtract, you can teach them, using real money, and help them to differentiate between the different bills.

You can play board games to teach older children financial literacy. They will love playing Monopoly and they will be learning too. Monopoly teaches children a lot of important skills like managing money, building a property portfolio, paying taxes and negotiating.

6. Introducing teens to the basics of investing

Teaching your teenagers about investing is a crucial step in their financial education. Start by discussing the different reasons people invest and the various investment styles. You can explain how to determine investment goals and the importance of aligning investments with these goals.

One practical approach is to use investment simulation apps to practice investing without financial risk. This hands-on experience can help them understand market dynamics and investment strategies in a safe environment.

Allow your teenager to participate in the decision-making process, guiding them through research and analysis. Emphasise the importance of smart investing as a way to make money and secure a financial future.

In a world where many people are afraid of investing, your message should be that understanding and practicing smart investment strategies early on can build confidence and financial security for the future. TTMB offers various resources to help you and your family learn about investing and make informed decisions.

Finally, remember that one of the best things you can do to help your children be financially literate is to set a good example. Your great example and your life lessons will empower them to have a bright financial future.

Own Your Future … Opening up to new possibilities

There is a lot to learn before entering the real world, including spending, savings, banking, earning, borrowing, giving, and investing, so start early to get your children on track for the future!

We hope that this was an easy, step-by-step guide to financial literacy for children where you can start early by showing them where money comes from, how to budget, spend wisely and set savings goals and investments.

TTMB is committed to your financial success. With TTMB also as your reliable mortgage partner, homeownership is within reach. Take the First Step Today!

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