Why Early Age Financial Literacy Education Matters
Here are several reasons why early-age financial literacy education is essential and holds immense importance:
You want children to have every opportunity to have a happy, healthy, and succesful life that includes financial security, freedom, and well-being.
Financial habits, feelings, and atttiudes are established very early in life. And, they can persist throughout adulthood whether they are good or bad.
It is "vital" to note, many parents, educators, and experts may not fully grasp how early adult financial behaviors begin to take shape. Surprisingly, research conducted by the University of Cambridge revealed that adult money habits are often established by the age of 7.
Drawing from my extensive experience of over 20 years in early-age financial education, during which I've interacted with over a quarter of a million children, it's evident that children's sentiments and attitudes toward money indeed start to develop at a young age.
Hence, it is crucial not to allow this "inculculation," "coding," and "shaping" process to occur haphazardly or inadvertently, if you want to provide children with every opportunity for success.
Initiating financial literacy education at a young age is crucial, as poor financial mindsets and habits can create significant hurdles, hindering success. By introducing financial concepts to children as young as 3 to 7 years old, many of these challenges can be preempted or reduced.
From birth, both children and adults are inundated with financial messages primarily promoting consumption, often irresponsible consumption. The sheer volume and influence of these advertising messages shape everyone's perceptions, attitudes, and habits towards money. Such conditioning severely compromises the prospects for success, security, peace of mind, and fulfillment for all, including children, if unchecked.
In the United States, we often fail to fully grasp and appreciate the relative wealth and opportunities available to us. This understanding becomes clearer with age, travel, reading, earning, and achieving, as these experiences enable more informed comparative judgments crucial for making consistent, sound choices.
One supporting metric for this assertion is studies showing that children wield significant influence over various financial decisions, despite their limited earnings or knowledge about money. They impact choices concerning food, toys, entertainment, clothing, technology, transportation, and more.
This phenomenon is less likely to occur in environments with fewer resources and opportunities. Moreover, it not only undermines family well-being but also inadvertently reinforces poor financial management habits in children.
Conversely, personal finance and economic education encourage individuals to practice evaluating choices, a skill with universal applicability and numerous benefits. Starting from childhood, the ability to weigh options can be cultivated and applied throughout one's lifetime across all areas of life.
Compound growth, or interest, is most advantageous when activated in your favor at an early age. Conversely, it is least favorable when someone else activates it to your disadvantage early on. Thus you want to teach kids early to earn it, and not condition them to pay it, as a result of over consumption.
Personal finance education offers benefits beyond just managing money effectively. Two of its primary advantages are: (a) Teaching delayed gratification and (b) Instilling discipline. These traits are crucial for achieving sustained success and overall well-being.
Final Thoughts
Remember, financial education, akin to all forms of learning, is a journey rather than a quick fix. Mastery necessitates repetition. While it doesn't ensure flawless decision-making, it does equip individuals with the advantage of making better, more informed choices, ultimately empowering them to pursue happiness, lead fulfilling lives, and have a greater chance for success making their dreams come true.
An early foundation sets children on a path toward financial stability and success. However, without basic money management skills, their prospects are significantly diminished.
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