The Importance of Teaching Financial Literacy to Children

It’s never too soon to start teaching children about financial literacy! After all, it’s one of the most important skills needed to navigate life, and the earlier you learn it, the better it is.

Think about it; what are a few simple skills you learned during your childhood that have helped you during the course of your life? Are there any skills you wish you’d picked up earlier? And, more specifically, how has financial literacy helped you during different stages of life? Would you have done certain things differently if you’d gained this skill earlier?

Young children are receptive to learning, and teaching them financial literacy at a young age can help them tremendously. Money is an important part of life, after all. The better kids understand it, the better decisions they’ll make along the way.

CompuChild makes financial literacy more accessible to kids through its finance & business focused after-school enrichment programs. Our Essential Financial Awareness program is targeted at 3rd-5th graders, and gives kids a basic understanding of currency, budgeting, and expenses, among other things. Here’s why teaching kids financial literacy is important.

What Is Financial Literacy?

Before we discuss the benefits of teaching kids financial literacy, let’s take a closer look at what the term actually means. Financial literacy is defined as the ability to understand and use financial knowledge and skills to make effective money-related decisions. It’s a way to manage money by learning and implementing financial concepts such as investing, saving expenses, budgeting, and debt.

Simply put, financial literacy is the ability to conduct transactions and use your existing knowledge and skills to make informed financial decisions. So, why should you invest in our children’s education franchise and help kids learn financial literacy? Here’s why it’s a good idea.

Financial Literacy Helps Kids Become Financially Confident Adults

You’d be surprised to learn how many adults struggle to successfully manage their finances. According to a CNBC report, 51% of Americans don’t have enough in their savings account for a financial emergency. A Bloomberg article reports that 13% of Americans spend more than they earn and struggle to keep a balance.

Providing kids with basic financial education can help them develop habits that would come in handy during adulthood. It allows them to establish a more conscious relationship with money. This, then, helps them become financially confident adults who know how to prepare for unexpected costs, save on expenses, and effectively plan for the future. They’re more confident about financial decisions they take because they’ve had years of practice and preparation. The lessons learned through different experiences also help them take financially sound decisions and maintain good financial habits in adulthood.

Financial Literacy Teaches Kids How to Differentiate between Wants and Needs

Another reason why after school program franchise teaching financial awareness are so important is because they teach kids how to identify wants and needs. Our programs are aimed at kids who are just transitioning from learning basic concepts regarding the value of money to identifying what qualifies as a want and/or need. Through the lessons, kids can learn how to differentiate between the two and reconsider their priorities.

This is an important lesson as it teaches kids about the true value of money. They learn about concepts like earning, spending, budgeting, and saving in detail, which equips them to make better decisions. Identifying wants and needs also helps them learn the value of goods, fluctuating pricing, and prioritizing their expenses. This is especially useful in avoiding impulsive purchases and unnecessary spending throughout their lives.

Financial Literacy Piques Kids’ Curiosity

Kids are naturally curious. Teaching them about money management gives them more insight into money management, sparking questions and initiating conversations. In doing so, it helps them receive and absorb accurate information.

After-school enrichment programs have a thoroughly researched and specifically curated curriculum that covers various aspects of money management. When kids receive information through these channels, they are more likely to ask questions and want to learn more. Thus, financial literacy helps them become better thinkers and learn the reasons behind different concepts. This helps them make better financial decisions.

Financial Literacy Helps Children Practice Financial Independence

Finally, financial literacy helps children practice what they’ve learned in after-school enrichment programs. This helps them become more financially independent, boosting their confidence and polishing their decision-making skills.

For instance, kids can apply what they learn during lessons to their monthly allowance. They can apply concepts like budgeting and saving to set financial goals, and work toward achieving them. Moreover, financial literacy also introduces them to the idea of earning money. They may feel intrigued to pick up a “job” like doing chores in return for payment or helping a friend with something. They may learn how to capitalize on their skills to generate a stream of income.

Mostly, financial independence gives kids the freedom to decide how they want to spend their money. They can apply what they learn to make financially wise decisions and spend their money in the most effective ways.

Become an Education Franchise Owner Today

Ready to purchase a children’s education franchise that facilitates financial literacy? You’re at the right place.

COMPUCHILD presents one of the very few children’s education franchise opportunities for entrepreneurs. Our one-of-a-kind Essential Financial Awareness classes help kids learn valuable lessons regarding money management that help them make financially sound decisions. Ourafter-school enrichment programs also help kids become more empowered and instill critical thinking skills to help them navigate real-life situations.

Contact us today to learn more about our kids’ education franchises and own a franchise to contribute to kids’ financial literacy.