No matter what is happening to the economy, it's always a good time for teaching financial education. Here are six great ways to start teaching ur children and kids about money:
1.The Money Diary
Help your children see where their money goes every week by having them keep an ongoing log or diary of every naira that comes in and goes out of their pockets. On the day you start this project,give your each child a special notebook with pocket dividers for keeping receipts for every transaction.
Make it fun by telling them that you would conduct surprise "audits",and if they can show receipts for every transaction there will be a reward.
When you conduct an audit,remember that the purpose is to give positive reinforcement not to find errors. If u do find errors, offer helpful suggestions to improve. When u find success,give them small rewards like a night off from helping with dishes or small gift.
2.Mini-Budget
Having a party or go in on a trip?
Give your kids a budget and let them work together to plan the event.Be sure to start them out with clear goals for what the money has to cover like all the food,entertainment, transportation costs,hotel etc .
Require the kids to present a written budget for your approval,as well as an itemized list of all purchases to be made. Their built-in reward will be getting to make most of the decisions about the event,but you can offer additional incentives such as putting a percentage of what they save in their savings accounts.
3.Beginning Banking
If u want to start ur children on the life-long habit of saving money,show them you are serious. Help them open a savings accounts while they are still in primary school. Firstly,visit several banks together and talk to the customer service or new accounts departments about their interest rates and services.
When you choose a bank,take your children with you to sign the signature cards and open the accounts. Encourage the kids to make deposits at least once a month by helping them find extra ways to put money aside for savings, such as doing extra chores for neighbors. In fact most banks offers promo for children account which could be a plus.
4.Benefits Of Compounding Interest
Ask your kids whether they would rather be paid N100 a day or N10 a day for doing an imaginary job for 28days. Tell them that if they choose the N10,you would double it each day. Have the kids get their calculators and compare how much money they would accumulate with each method at 7 days,14 days,21 days,and 28 days. Explain to them that money in their savings account won't double everyday, but they do earn a special type of interest called compound interest. Help your children use calculators available on the interest to,see how fast N100 in savings will double at various interest rates.
5.History Of The Stock Market
News commentators are always talking about how much the stock market went up and down. Do your kids know why? Click here to research the history of the stock market originate? What is the Nigeria stock exchange All share index?How do people make money on the stock market? Explain to your kids that that the stock market has earned an average rate of returns higher than savings rate offered by banks for the past years save for the last 2-3 tough years. How fast would the money in their savings account double if they earned 10% for instance? Point out that there have been times in the past when the stock market has gone down significantly,but
the stock market has always rebounded. See if your kids can predict what stocks will be good investments for the current economic climate. Show them how to start tracking these stocks daily to see if they are right.
6.Shopping For Investments
Kids are some of the greatest stock pickers in the world. They are very aware of the trends. When you go to the mall,the grocery store,or out to eat with your kids,make it a game to be on the lookout for products or companies they think might be good future investments.
Have them keep a list of their picks,and teach them how to research the companies to see how they performed in the past. Send off for annual reports,and watch the news together for story about these companies. Have your kids create mock portfolios of their stock picks and follow them for six months. What would have happened if they had invested N10,000 in real money in this portfolio?
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