My children are in primary school and I have started to give them ‘money classes’ since some of the important money knowledge is not taught at school. In the next few chapters, I’d like to share what I have taught them so far:
Function of Money
At a very young age, my children started to know money is very powerful. It can buy food, clothes, books, and toys. They also read from books people used to use shells, cows, and gold as money before using paper money today. I told them money can be used to store value (so they can hold on to their pocket money today but only spend it next week), measure value (so they can compare the value of two different goods), and as a medium of exchange (they can use money to buy stuff).
How Can We Earn Money
I told them there are a few ways we can earn money. One is from employment the company will pay salaries to the workers. That’s how most people earn money. People can also earn money if they run a business (for example an ice cream shop), or if they invest in a business (for example they give money to help someone open an ice cream shop and in return, they get some money back). The bottom line is we need to put in the effort to earn money.
Money vs Wealth
They asked me, if they earn a lot of money when they grow up, will they be very rich? I told them that depends. Being rich (or wealthy) and earning a lot of money is not the same. If they earn a lot but spend all, they will have nothing left, and they will not be considered rich. Wealth is what is left after spending. After learning this, my kids now will not spend all of their pocket money and they have started building their piggy banks!
To be continued…
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