To become financially responsible adults, children should learn to handle their money from a young age. Discuss.

Managing money is a key life skill and it is critical that children should learn this skill at a young age. Developing financial management skills plays a key role in providing a secure environment for individuals and future generations. In this essay the strategies for educating children in financial management will be discussed. In general, people mostly learn from experience. For this reason it is very important to give children the opportunity to handle money from a young age in order to give them experience and to encourage independence and learning. It is also important that children can do this in a safe environment, free from the consequences of serious errors. Usually, children first obtain access to money from pocket money that is provided by their parents. This gives parents a great deal of control over what children can buy. The challenge for parents is to choose the most appropriate amount of money to give children. In most instances, the most appropriate amount of money is enough to meet children’s basic costs (for example bus fares or lunches) plus a little more to give them freedom to make choices about how they spend money. This approach is very important for children as they must make decisions regarding whether they want to save money for future and perhaps larger purchases or whether to enjoy their money today. They learn key skills such as self-discipline and planning. However, perhaps the most important skill that children learn is the value of money. The scarcity of money means that they learn that money is valuable and hard to obtain. Too little pocket money denies children the opportunity to make choices and learn, while too much can be disastrous for a child’s future. Providing children with too much money means that they do not have to make any difficult decisions and there are no consequences for purchasing mistakes. They are also taught that money is readily obtainable and does not have to be valued. Of further concern is that having access to too much money means that children are open to exploitation and could leave them with questioning whether their friendships are based on money or on genuine like or respect. Excess money also gives children the opportunity to involve themselves in activities such as smoking, drug taking or alcohol abuse. Furthermore, giving people a great deal of money at a young age denies them the opportunity to become successful in their own right. The challenge for parents becomes greater as children become older. Young people may have part-time jobs and earn their own money. When this occurs it is important that good habits are established because this is a time in peoples’ life where their income may exceed their needs. If good habits are well established there is the opportunity for young people to build up money and gain personal experience with investments such as fixed deposits and shares. There is also the opportunity to start building towards future needs such as purchasing a house. In summary, it is of critical importance to teach children about finances as this can give them important skills and habits for the future. It can also help them to establish a financial base and provide security for themselves and future generations.