Developing children's financial management skills

Developing children’s money management skills

I asked one of my relatives how much is the appropriate amount of money for my son? I don't want to give him too much so he learns to be extravagant. With her question, she raised a feeling of the importance of discussing the financial education of children. Dealing with money is an important educational issue, and many parents do not pay attention to its educational importance, and the serious behavioral phenomena that neglecting it can lead to, such as extravagance, extravagance, miserliness, or lack of awareness of the various risks in financial dealings. We have directed The Qur’an calls for attention to financial transactions and warns us of the behavioral evils resulting from the misuse of money. God Almighty said: And give the relative his due, and the needy, and the wayfarer, and do not waste with waste. (26) Indeed, the wasteful are brothers of the devils, and Satan is ever ungrateful to his Lord. (27) And God Almighty said, “And eat and drink, and do not be extravagant. Indeed, He does not like the extravagant.” (Al-A’raf 31) And he, may God bless him and grant him peace, said He said, “A servant’s feet will not move on the Day of Resurrection until he is asked about four things: his life and how he spent it, his body how he used it, his knowledge, what he did with it, and his wealth, where he earned it and on what he spent it.” 2 “Narrated by Ibn Hibban and al-Tirmidhi in his collection.”

Many economists and educators have spoken about wasteful behavior and considered them among the most important factors in the failure of projects and human suffering as a result of their irrational financial behavior. Individuals who suffer from the problem of extravagance need a great effort to get rid of this behavior that is destructive to success, and learn to rationalize behavior and not rush in purchasing decisions. By training children on proper financial dealings from the beginning of their lives, we have prepared them to ask about the blessing of money, “and about its money, where it was acquired from...”

We contributed to educating and motivating them to be successful investors and qualifying them to play a role in serving their families and society.

What is nice about the subject of financial education for children is that it includes an important educational element, which is training in decision-making. Every day there are spending decisions and situations through which one can acquire the skill of dealing with money, so in addition to training in money management, we have achieved training in decision-making.

The question now is how and when do we start teaching our children to manage money?

Interest in financial education begins from the beginning of the child’s learning to count, and there are ways and methods through which the child can be provided with information and provide opportunities to acquire skills for dealing with money, including:

• Observing the parents' financial behavior and wise ways of spending, as role modeling is the most effective method. Children also learn proper consumer behavior through daily practices of preserving grace and not being extravagant, and making use of leftover food to make new dishes for the next day.

• Forming a long-term view of saving. For example, when providing an allowance to the son, let it be 5 riyals, we offer him to take four riyals and save a riyal.

• Directing the child to charity and giving a sum of money every day or every week to charity... and that charity purifies money and develops it, and that when a person is in financial difficulty, the best thing that can be done is charity, in addition to the fact that it expiates sins and brings a person closer to God Almighty.

• Introducing the topic of money into regular family dialogues - the weekly family meeting - where children are discussed and introduced to the tools and methods of financial transactions, and older children can discuss the country’s economy.

• Helping children differentiate between need, desire and wish.

• Providing the opportunity for children to learn about the bank, and a special account can be opened for those who are aware of it, leaving them free to withdraw from the account the amount they want. Practice with guidance is one of the most important means of learning.

• Establish a record of spending and saving in such a way that the amount, what was spent, and what was added to it are clearly written in a way that makes it easy for the child to see his financial situation in the form of numbers. Dealing with children needs to be as close to sensory as possible, and the need for sensory increases the younger the child is.

• Shopping is considered a very suitable opportunity for children to learn the skills of recognizing prices, making purchasing decisions, and following up on collecting accounts and paying the value.

• Warning children against financial transactions that have negative effects, such as debt or installments, and clarifying the harms of getting used to debt, and explaining how installments mean paying for the same commodity a greater amount than it is worth, and that saving and good money management make you indispensable from such transactions, the accumulation of which leads to Misery of a person and making his life miserable.

• Be careful not to accustom your children - even when they reach university age - to credit cards that encourage people to pay without paying attention to their real purchasing power, so they are surprised that in the end they have to pay back what they paid through the credit card, which may exceed the amount of money they have and force them into debt.

• One of the very useful situations, especially before Eid, when the children receive sums of money and the opportunity becomes ripe for application, is to play the shopping game, which includes corners: a toy store, an ice cream shop, a grocery store, a library, a flower shop... Prices are set on all goods, and each has A child receives a sum of money and must decide what to buy with the amount. The parents, or one of them, participate in the game by purchasing a group of goods, comparing their purchases with the child’s purchases, and directing them indirectly to determine priorities.

To answer the question with which we began our topic regarding the value of the expense, in the beginning the amount is determined according to the needs it is supposed to cover. Does it include buying the necessary games and stories or does it cover the daily needs at school only? The child’s daily allowance must be sufficient for his needs so that he does not look at what is in the hands of his peers, and it must not be excessive so as not to lead him to excessive purchases and waste of money. It is preferable to provide the child with the allowance on a fixed basis and not according to demand so that he can be guided and trained in money management. .

Dr.. Sahar bint Abdul Latif Kurdi

Family and child counselor