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Financial education for primary school (6 to 9-year-olds) - Part Two

What you will find in this article:

This is the first part of the article about financial education lessons for 6-9 year olds. Check our blog for the first part.

Why do kids need financial education and how early should you start?

According to a 2014 NBR study, ONLY 4.8% of children in Romania learn about money at school. Learning about it at home is out of the question - another study conducted by Erste Group shows that Romanians (adults, this time) don’t even know how to save or manage their income.

If you are among the informed (or willing to get informed) parents and you want to help your kids become responsible adults, then you should start talking to your little ones about money from the age of three. Even though they are so young, the lessons at this age need to be practical and introductory. Although simple, from now on, these lessons and principles will guide him all his life. See here which are the things that children aged 3 to 6 need to know about money.

What do 6-9 year olds need to learn about money?

This period is extremely important for the future of your children. Some studies have shown that the main influence of children's financial behaviour is parents. It is also proven that what children learn up to 7 years old will stay with them for all their life.

That's why we divided the financial lessons for primary school children into two categories - the theoretical lessons, which we’ve talked about in the first part of the article, and the principles.

The most important principles, which we will talk about below, are: 

  • Long term goals vs shot term goals 
  • Goods vs Services
  • Needs vs Wants

Long term goals vs short term goals

From primary school, children need to know to differentiate between long-term and short-term goals, as well as how they affect certain financial decisions and how to choose and prioritize between the two.

Setting goals is a skill that can be learned. Some statistics tell us that almost 92% of people fail to achieve their goals. Well, we think that those people don't really know how to set their goals.

Generally, there are two types of goals (not just those regarding financial education): 

Short-term goals - these are the goals that don’t require too much effort or, in this case, too much in savings. These goals are related to the purchase of goods or services that have moderate or low prices and can be purchased without too much effort. For example, a book or a T-shirt can be considered short-term goals.

Long-term goals - these are, in financial terms, goods or services that are more expensive and require savings to be purchased. These should be established and prioritized when kids either don’t have enough money or they have a limited amount of money and they wish to buy more things.

In this situation, children need to understand the relationship between long-term goals and short-term goals: Even if they have enough money to afford certain things, they may run out of money to afford other things that they might need. Here, we’re talking about other financial concepts, such as Opportunity Cost, which we’ve talked about in the first part of this article.

Goods vs services

If the little ones learn at the right time about needs, desires and the difference between them, they will become responsible adults who have a happy relationship with money. If not, well...they will be guided by urges, impulses and other irrational decisions.

If you want to learn more about the difference between needs and desires, check our blog where there's an article where we wrote extensively about the topic. 

We will make a short recap here too: 

What are goods? 

In the past few years it's been a bit harder to explain to kids what goods are. Before, it was simple - goods were the physical ones that could touched and held in our hands and services were the ones that weren't physical.

Acum însă, când există atât de multe produse digitale, e greu pentru copii să facă această diferență. De aceea, pentru această lecție practica este cea mai importantă – implică-l pe copii în decizii financiare, cumpărături și arată-i exemple dintr-o gamă mai largă de produse, pentru a-și face o idee. 

What are services?  

Services are actions that someone can do for someone else for a price. These actions can also be related to the skills one has or to the information or intelectuall property they own.

If the difference between physical goods and services is easy to understand, the diffence between digital products and services might not bethat easy to comprehend. This is why you must count on the power of example and practice once again. Talk to them about various service you pay for - getting a haircut, going to the doctor, the mail or repair work around the house.

Another good example is about utilities and you can pay the bills together with your kids to make them understand how we pay for such services provided to us.

If you want to find ou more about the difference between goods and services, download the worksheet below: 

Needs vs wants

If children learn about needs and wants and the difference between them at the right time, they will be responsible adults who don't fall prey to impulses or other irrational factors.

 If you want to find out more about needs vs wants, check our blog where we wrote a comprehensive article on the topic. 

What are the needs? 

Needs are the essential things that we need for our survival. They are the things that we, literally, need to live. Among them, we can mention water, heat, shelter and even the bare minimum clothing.

What are wants? 

Wants are are things that help us, that make our lives easier but which are not essential for our survival. They can be toys, devices and other "nice-to-have" things.

are things that help us, that make our lives easier but which are not essential for our survival. They can be toys, devices and other "nice-to-have" things.  

Put the lessons about Needs and Desires into practice with the help of the worksheet that you can download, for free, through the button below.

Conclusions - What you must remember after the second part of this article:

  • Short-term goals are things that can be acquired on the spot while long-term goals require savings. Also, the difference between the two is given by the level of priority that each purchase to be made has.  
  • Short-term goals are things that can be acquired on the spot while long-term goals require savings. Also, the difference between the two is given by the level of priority that each purchase to be made has. 
  • Needs are essential to survival, while desires are not. The difference between them is relative and it is influenced by several factors.  

If you want to implement the lessons in this article, download the free financial education video game for children, Investory: 

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