Financial education plays a very important role in our lives, so by teaching our children about personal finance, services and the value of money, they will be better prepared for adult life.
Parents are the biggest influence on children, so leading by example will be the best way to teach them to have good personal finances.
The National Commission for the Protection and Defense of Users of Financial Services (Condusef) says that children are in contact with finances through different scenarios such as home, school and the media.
In this regard, Elizabeth Mondragón, spokesperson for yotepresto.com, commented that it is easier to teach personal finances to a child than to an adult, since they do not have preconceived ideas, everything they hear, tell them and teach will be what they will assume. .
Most frequent errors
Mondragón comments that one of the most common mistakes parents make is to speak ill of financial products in front of their children.
“If the boy or girl sees that their parents fight over money, that they don’t save, they misuse their credit cards and that they are in debt all the time, that is what they are going to learn,” he explained.
Otherwise, if we begin to speak well of these services and teach our children to use them responsibly, they will begin to educate themselves financially.
Another mistake that parents make is to talk to them in a very complicated way about money, since they can lose interest in the subject.
In the opinion of Elizabeth Mondragón, “the ideal is to talk to them in terms that they understand, for example, if they ask about buying something, give them examples and explain them in terms, such as the value of their toys or the amount of their Sundays, as well the child learns the value of things”.
Parents also make the mistake of not involving their children in family financial decisions, as it is an opportunity to teach that they can contribute something to said decisions.
Most parents who don’t teach their children finances or don’t involve them in financial decisions consider them too young for these topics, but according to the spokeswoman, children can learn finances as early as three years old.
In addition to this, parents should encourage savings in the little ones, not only keep the money in a piggy bank, but also open a formal bank account for them, so that they get involved in the traditional financial system and learn how it works.
Tips to encourage savings
Elizabeth Mondragón argues that it is necessary to give the minor a fixed amount of money from time to time, since according to a survey carried out by the portal yotepresto.com, in Mexico, 32% of parents do not give their children the famous Sunday.
In addition, the spokeswoman explains that parents make the mistake of not setting savings goals for their children, these could be, for example, saving for a certain time to buy a toy.
Another option to encourage children to save is to give them remuneration for some household obligations, so that they also learn the value of money.
Engage them in financial services
The first step could be to open an account, some banks offer accounts for children that can be accessed from 100 to 500 pesos depending on the banking institution.
When they are a little old enough to understand the investment system, they can open an investment account, for example, Cetes Direct has the option of opening a portfolio for minors.
“Another thing they can do is, when they come of age, help them process their first credit card, there are many ways today such as fintech, in which you can even process a card from your cell phone so you can explain to them how to get this instrument,” explained Elizabeth.
Once you have the card, you must explain to them how to use it responsibly, that is, preferably to cover the payment so as not to generate interest, to be aware of the cut-off date to make payments in a timely manner, etc.
The importance and benefits of insurance can also be explained to children and that, when possible, they can hire one.
The Condusef also recommends shopping together with our children and teaching them to make a budget with what they have to buy and showing them that impulse purchases could exceed the budget.
Likewise, the organization comments that it is important to respect the decisions of the little ones, but guiding them so that before acquiring something they take into account aspects such as quality, duration, extra expenses, etc.