When is it the right time to teach children about money? Or even teach them about the art of giving? Often, parents and guardians avoid talking about finances in front of their children because they won’t understand. Numbers can be intimidating, even for adults, but childhood is actually the perfect time to learn about financial literacy.
So with that in mind, this article will talk about fundraisers as the perfect tool to teach children financial literacy and the value of charity.
It goes without saying that children who are taught financial concepts early on tend to become more independent later in life. If they understand the risks of borrowing money and overspending, they are more likely to avoid falling into debt later on.
They’ll also start thinking about the value of earning and saving for future purchases and retirement. This may sound like we are getting ahead of ourselves but not when you dig deeper into the facts. The Office for National Statistics reported that only 37% of people aged 22 to 24 are generally satisfied with their household income. This age group are more likely to be living alone, earning money, and paying for their own bills. Financial literacy can make all the difference between feeling content and feeling frustrated with your financial standing at an early age. This is why it is important to plan ahead when teaching your children the importance of money and how to manage it.
Children have a natural inclination to share with others, even though it may not be always evident in the way they play. Altruism gives off feelings of happiness from being able to help other people, and it encourages children to continue giving. When they grow up with healthy finances, they are more equipped to help other people through charity, which is why it’s important to cultivate both.
Using fundraising as a tool
Fundraising is the perfect tool to encourage your child to be generous; as well get them started with handling finances. Save the Children has a complete A to Z list of fundraising ideas, many of which are great for kids like a bake sale and a talent contest. Let’s look at a bake sale as an example and how it can help introduce a few basic financial concepts:
• First, establish the reason for having a bake sale. Let the child choose a cause that is dear to them so they will be more driven to do the fundraising. What you can do is introduce them to different organisations that need help, but it’s also important that they have a connection with a particular community. For instance, the activity might consist of raising funds for school supplies to be donated to less fortunate children. Since they’re in the school system and understand the need for basic school equipment, they’re more likely to connect to the overall purpose of the fundraiser.
• We tackled budgeting in another Family Money article, particularly for planning a birthday party, and this strategy can be applied to any type of activity. Let your child take charge but make sure to help them with conceptualising for the bake sale. Are you going to make cupcakes or brownies? What ingredients do you need? This will teach them the concept of creating a budget which they will need to master as adults.
• When you go shopping, start showing them ways to cut costs and how to spend their money wisely. For example, generic chocolate is cheaper than branded ones but the taste probably isn’t too dissimilar. The money that they save from shopping can be used as seed for the next time they hold a fundraising activity.
When you go shopping, start showing your children ways to cut costs and how to spend their money wisely.
• As you’re helping them bake, emphasise the value of hard work. This will instill in them the idea that most people aren’t handed their wealth. It demonstrates that they need to put effort into earning to be able to survive and live a happy and comfortable life. Remind them who or what they’re doing this for so that they don’t lose interest in doing charitable work. You can say that for every cupcake that they bake and sell, they’re helping one child purchase a notebook for their studies. It’s important to illustrate concrete examples because it makes it easier for children to grasp the concept of giving.
• The money that they make from the bake sale is a good way to teach them about saving. While it’s important to reward them for working hard, the money they raise shouldn’t be spent all at once. They need to save a portion of it for future bake sales and the proceeds for their chosen cause.
The way you educate your child on financial matters doesn’t have to be complicated. Similar to the example above, break down an activity they like into small steps and how money factors into each initiative. The earlier they learn about it, the better they’ll be responsible for their own money in the future.