Children's Financial Intelligence Training

Practicing financial intelligence in children is not difficult, but also not to be taken lightly. In fact, many have failed in their journey and created human beings who fail to distinguish between needs and wants. Buy ... buy ... buy ... Consumptive action has become a way of life for the metropolitan community. This lifestyle has spread to villages.

Children's Financial Intelligence Training to Be able to Distinguish between Needs and Desires which can prevent consumptive behavior by introducing the value of a product.

It's not uncommon when kids are invited to shop monthly at big stores, they will be fascinated to see all the things that have or haven't been seen in commercials are there. They may be busy running around, as if they don't care, even if they are recording what's there, looking for what they want.

This is where parents need to introduce the "product value" of the item the child wants before buying it. This is very important so that children don't get caught up in consumptive behavior.

The definition of product value is the value or value of a product in the eyes of the buyer. The ratio between the benefits that consumers get from the product and what (or price) consumers get when they get it.

In simple terms, product value is the price or function of a product. Trivial .... and sometimes underestimated. But it can have a big impact. Who has ever taken the time to explain to children what the value of all the foodstuffs was produced at that time?

Children know the financial limits of the family

Parents should have the courage to admit their financial limitations to their children and explain to them the mission and vision of the family. Don't be embarrassed if it's not as many as other families.

I even used it as a joke, when I said, "You must be your boyfriend's idol, but you are ashamed of your allowance."

The handsome man grimaced, scratched his head that did not itch, and finally admitted without shame, let alone uncomfortable, that he was more often in class during recess because he didn't want to waste his pocket money. My guess is correct because I know, there are 4 friends at school who have a crush on him. Especially in junior high school, he was one of the students with good grades, almost always the highest in mathematics and exact sciences, and was even cared for by his teacher because he managed to score 10.

He was grade 9, and the allowance was still under 10 thousand, but he could manage it well. One of the costs involved in buying your own internet quota and paying for a number of photocopies. He used to save money since grade 1 of elementary school.

I remember when he first got pocket money. He was confused because he only had IDR 2,000 pocket money and a lot of snacks. I said, "Look at all those snacks, which one you like the most, pick two for today, pick two tomorrow, and so on." In less than 6 months he was bored with snacks and bought 2 toys for him and his sister. After that, he saved because he didn't want to buy anything but necessities.

So, when he was in elementary school and asked for a cell phone, I gave him the condition that he could buy credit himself. And he did until now, it's been 6 years already.

Don't tell me I'm cruel, because that's as much as our ability to provide pocket money. Expenditures for allowances must be carefully thought out, taking into account the amount of income and the amount of expenses that cannot be imbalanced.

Financial savvy and financial planning

It is very important for parents to teach their children financial intelligence, as well as financial planning procedures. This lesson can be started with kindergarten age children.

It has to be from that early age, so that later teenagers begin to understand the importance of money as a medium of exchange that they can use to buy various items they want. The effects are long lasting when the child is an adult.

Financial intelligence is a person's ability to make decisions on his finances, while financial planning is the process of personal financial planning to achieve financial goals, both short-term, medium-term, and long-term goals.

What is the difference?

Financial intelligence teaches children the ability to manage their pocket money, have the ability to make financial decisions so that children have responsibility and confidence in managing their finances. Meanwhile, financial planning teaches the process.

Financial intelligence has a broad meaning and if taught to children from an early age, can form positive habits that help children achieve financial goals both now and in the future.

Teaching financial intelligence and financial management can also be in the form of teaching children how to make money with their abilities. Since elementary school, the eldest has "sold" assignments to friends, with access to his laptop and printer at home. I provide 2 types of HVS paper so that he has no trouble "smoothing the action".

Management of children's pocket money

A child's assessment of money grows according to how he sees his parents treat money. We certainly don't want to have children who don't appreciate the value of money and the efforts that need to be done to get it, right?

So he needs to be taught to have a purpose why it is necessary to plan and manage his finances.

A goal is something that is targeted. Something you aspire to, want to do, want to get in the future.

The goal that you want to achieve, how long will it take to realize it?

Management of children's pocket money

Recommend short-term, medium-term, and long-term goals.

The time frame helps children realize that there is such a thing as delayed gratification or delaying pleasure.

Examples of the goals of the elder brother are:

1. Short term: buying credit monthly (routine needs)

2.Mid term: buying something he wants (wants)

3. Long term: upgrade the device

The above decision has financial consequences.

Principles in educating children

Educating children to have financial intelligence and making them understand the difference between needs and wants, is not something that can be done instantly. It takes time, examples, understanding, and help. For that, parents need to know the 5T principles in children's education.

I quoted and developed 5T in children's education from Kak Seto, who apparently also quoted Bambang and Hanny Syumanjaya's book Just For Parent. What is that?

1. Time (time)

Quality time is very important because in that time we can all do many things together with children. There are many things that can be introduced to children during their time with him. Sometimes children just look. They may not yet understand the routines they see but will reminisce about them later, and some are immediately imitated.

2. Telling (tell)

Telling is an action that we should do so that children can understand the wishes or expectations of their parents. Parents must be diligent in telling children about what they can understand and need. Don't be stingy with your children. Of course a good word.

3. Teaching (teaching)

Besides telling about the family values ​​that are held, parents must also teach children how to do it. Explaining it while doing it will quickly be understood by children. Many parents don't teach their children life skills as part of teaching independence. For example, after eating it must be washed immediately. Sort and choose what foods can be eaten now and save for later.

4. Training (train)

Parents should train their children in fun ways. Training children to share food to eat later is one of the money management lessons that can be practiced since children are 2 years old. Maybe 1 year already. He will understand later. For older children, pre-adolescence which is a period of growth and development due to hormones, children will be very fond of anything. It happened to two of my children, aged 12 and 15.5 years. They are always hungry .... So, train in a fun way.

5. Togetherness (togetherness)

Teaching and training need to be shaded in a togetherness because the strength of togetherness will erase fatigue in learning and fuse frustration in a training. I don't know how many kilometers of wounds a parent might have when practicing life skills on their children .... Let's erase them together.

The 5 principles above can be observed to be imitated and modified according to family conditions.

Parents can teach financial intelligence through pocket money and governance. Teaching financial intelligence can also mean teaching children to appreciate money. Remember, extravagant children, are usually influenced by the behavior of their parents or friends.

Parents can teach financial intelligence through pocket money and governance.

So, it really needs to be taught in stages. Here's how to teach children to manage pocket money based on children's readiness to manage money.

It is also a good idea for them to be introduced to some part-time jobs that can be done by teenagers.

Needs vs wants

Desire is every need for more goods or services that every human being wants to fulfill in something that is considered lacking. Desire is non-binding and has no immediate conditions to be fulfilled. Desire increases when basic needs are met.

Needs are all goods or services needed by humans to support all activities in everyday human life. Needs will not be separated from everyday life.

The difference between the two is actually quite clear.

A need is something that humans must have because of the high level of need or urgency. If someone has a need for goods or services, usually the most important thing to pay attention to is the benefits that can be taken from these goods or services and their functions.

In stark contrast to desire. Desire is subjective and has little effect on a person's survival. Even related to taste or lifestyle. If it is fulfilled, it feels satisfied.

One that I often say to my children is:

Internet quota for dad is a need to work, while for you is the desire to stay updated and do hobbies (reading manga, playing games, and communicating with friends.

Usually, he would look at me in disbelief or want to find a suitable rebuttal. ...

How about internet quota?

Well ... when it comes to living in a house like this, the need for quota struggles with the desire to open up daily tasks, watch movies, play games, or comics on the webtoon.

They also see his father tussle between duties as a writer, blogger, influencer, and more, holding a cell phone and in front of a computer. In the past, they only watched it when they came home from school and at home. Now 24 hours at home, by sleeping 2 hours later, they can misunderstand the amount I open the internet and social media.

Don't hesitate to share your opinion about how to train financial intelligence so that children are able to distinguish between needs and wants.