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Financial literacy is a topic that we can introduce to our youth groups.
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One of the best gifts you can give a child is to have them learn about handling finances.
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This gift can have an enormous impact on them throughout their lives.
At Christmas, I had the opportunity to review the book, “The Barefoot Investor.”’
The book is by Australian author and investment adviser, Scott Pape. His book contains many common sense techniques about money management specific to Australia.
I spent this past Christmas in Australia. I was visiting my daughter, son-in-law and two grandchildren. My granddaughter is 14 years of age and my grandson is 12.
After browsing the book, I gifted a small amount of money to each grandchild. The gift was to encourage them to start on their financial literacy journey.
My grandchildren had discussions with their parents about Scott Pape’s financial concepts.
FINANCIAL LITERACY DISCUSSIONS ARE UNCOMMON:
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It appears that few people have had discussions at home or at school about handling finances.
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Studies show that many North American adults have a low level of financial literacy.
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Our finances are a key element throughout our lives.
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It is a good discussion to have, often the younger, the better.
A GREAT GIFT: FINANCIAL LITERACY:
One of the best gifts you can give a child is to have them learn about handling finances.
It can have an enormous impact on them throughout their lives.
Financial literacy is a topic that we could introduce to our youth groups.
WHAT IS FINANCIAL LITERACY?
Financial literacy can be defined as:
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Understanding how money works in the world;
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How we earn or acquire it;
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How we manage it;
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How we invest to increase it, and;
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How we donate it to help others.
It appears the more knowledgeable a person is about how they relate to finances, the better off he or she is financially.
A SUGGESTED APPROACH:
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The way people interact with money is not simple.
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Telling them to save money and avoid debt is not enough.
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We need to discuss finances and assist youth to think about an overall approach.
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Children are already thinking about money.
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They are observant and can often describe many concepts like supply and demand. In some cases, it is in relation to buying and selling second-hand goods such as electronic games.
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A good approach is to use questions to stimulate and guide their thinking.
EXAMPLE QUESTIONS:
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Reasons: Why was that decision made?
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Evidence: What proof can you give that it was the best decision?
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Options: Why might others not have agreed with the decision?
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Impact: Who was affected by the decision?
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Consequences: What were the possible results?
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Review: Discuss examples and how they worked out. What might be done differently next time?
Also, they can discuss the odd financial misadventure and mistake.
RESULTS:
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These types of questions and discussions have the potential to promote critical thinking.
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It can avoid being too judgmental or interfering.
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This enables them to think about what drives their financial decisions.
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One of the best gifts you can give a child is to have them learn about handling finances.
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This means that discussing money and practicing making decisions can help children build financial independence.
Have you had experience discussing money and various approaches with youth?
What suggestions do you have that we can use to improve our children’s financial literacy?
What are your thoughts on this important subject?
Please share your ideas on how we can work with our youth and assist them to gain financial literacy. This will enable them to gain the communication and leadership skills required in the 21st Century.
If you require more information, please contact us.
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Wishing you lots of love and laughter, as always.
Fred Jones
Victoria, BC Canada
Fred Jones
I too have read the Barefoot Investor now and believe it is an awesome tool for parents to get on top of their finances and teach children the basics of money management, reduce stress and anxiety later in life. Thanks for the interesting articles and keep up the good work