Too little about it is talked about

What the children already know about money and how parents can help develop the right financial habits was commented on by Andželika Rusteikienė, the head of Lithuanian Junior Achievement.

– At what age do children start to become interested in finances?

– International research shows that children start thinking about financial literacy at the age of three, because they face the first things when we buy goods or services at home when they have to change toys with each other.

With financial literacy, we can start working from primary classes with financial literacy. In fact, it is very interesting for a child aged 6-7, where parents make money from, how those money allows, what is a budget, why sometimes it is not enough to buy LEGO every week.

We develop beginners in four areas: that they understand what income, expenses are and how profits come, that they need to save and how to do it, then taxes – who and why we pay them and to get to know the financial system – what banks, credit unions are.

Photo by RF123

– What are the most common misconceptions or myths about the money you notice among children?

– The classic case – when children are not distinguished by taxes not only for services as heating, but there are taxes we pay to the state. Second, we see that children know that money can be made and spent, but when they need to calculate how much the item costs or how much money they have, what return they have to buy after buying – they do not yet pay it.

We allow very little kids to decide what to do with money. At school, we buy meals, buy food at home, buy clothes – do not give the kids money ourselves. And it is through practice that they can start calculating returns, income, costs.

– Do you notice differences between children who receive pocket money and those who do not get them?

– Boldly give children a week, even a month or even a quarter of money to plan them themselves. We are seeing a huge change – today more and more elementary school teachers are learning and developing children in financial literacy in Lithuania. We see a clear difference between schools where such topics are from first to fourth grade, where children are twice as good at questions as in schools where there is no financial education.

It also has to do with age – when children enter adolescence, we are already teaching them budgeting, financial goals, investment beginner and entrepreneurship – how to create what they like. Those children who have learned about income, expenses, taxes from primary school – already have a fair understanding of how and why to save, how to make a budget. In grades 5-8, they can boldly set a financial goal, for example, I want a phone after a year, so what I have to do today to save the required amount. I want to invest, so I plant my parents and ask me to open the bill and can already start accumulating in small amounts.

Meanwhile, where children do not have such education, we see that they know what the budget is, knows that parents make it, but do not know how to manage it. They do not distinguish between different sources of income that money can be from work, from investment or from savings. Children do not know how to make expenditure categories that, for example, we spend money on food, clothes, home care and so on.

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– What are the biggest mistakes parents make when teaching children about money?

– I think it comes from great love and desire to protect the child. Sometimes parents do a bear service – we know that the budget exists, but we talk too little about it with children. Children often do not know that the price of the product also consists of taxes. As parents, we should allow children to make financial decisions. Let’s give your child 10 euros a week – let it spend the first, second, third week, even if it is 30 times. It is a relatively small money, but a very important experience.

Parents need patience. Like teachers – they do not develop in one day, it takes years. If we, as parents, would include a child daily in expenditure planning, the fracture would occur. Especially teenagers – they are very afraid to make financial decisions because they do not have experience at home and do not know what to do with money.