What children should know about money: how to teach your child financial literacy

Teaching children financial literacy doesn't have to be complicated and formal. It's much better to incorporate these everyday activities into your daily routine to help children understand the importance of personal finance.

News Bytes writes: "Financial literacy is a vital skill that will benefit your child in the long run. SSPDaily prepared some useful tips on how to teach them to understand money matters."

Involve children in grocery shopping

Before we go to the store, we set a budget and try to stick to it.

Involve your children in this process and explain why it is important to spend money wisely. Show them how to compare the prices of products of different brands and help them make a list of items to buy.

This will teach your child how to prioritize and plan ahead.

Open a bank account for your child

Opening a bank account is an effective way to teach your child how to manage money. Before doing so, however, explain to him or her how the bank works and what services it offers.

Teach your child the basic banking rules, such as depositing and withdrawing money, reading statements, and using online banking.

Set a monthly allowance

Determine the amount that is appropriate for your child's age and needs.

"Tie up the pocket money for homework or other responsibilities. Clearly define how it should be used, and what it can and cannot be spent on.

Teach your child to save some of their pocket money to buy their school supplies.

Introduce children to the stock market

The ability to invest effectively in stocks is one of the keys to long-term financial well-being.

Before investing in stocks, explain to your child what stocks are and how the stock market works.

Choose stocks that he or she is familiar with, such as those of companies whose products he or she uses.

Start with a small amount and invest in several different stocks.

Make learning a game

Play business board games with your kids. This way they will learn how to budget, save, and invest in a fun and interactive way.

There are several money apps designed to help kids learn how to manage money. These apps offer interactive games, quizzes, and tasks that teach basic saving and investing skills.