kids and economic behavior

Bahman Khanalizadeh

PhD Student in Financial Economics, Department of Economics, Islamic Azad University, Zanjan Branch, Zanjan, Iran

(Email: Khanali.bahman@yahoo.com)

abstract

Economics is almost a part of everything you’ve ever thought about. Economics is not just about studying money, it is about studying everything that needs to be done with money, such as trade, savings, investment, profit, credit, taxation, and future forecasting.

Many economists and researchers believe that in order to have a dynamic, efficient, and entrepreneurial society, economics and finance must be taught to people from an early age, because they can guide them in the right direction of investment and entrepreneurship. Today, in most developed countries of the world, including the United States, many economic and financial concepts and skills are taught to people from childhood, because in the future they will need this knowledge and skills in any job and situation. There are many reasons why children should become familiar with economics from an early age, perhaps one of the most important being that they will grow in this economic situation, Therefore, they need to know about the financial and economic situation of their country, because with this skill and knowledge, they can adopt appropriate financial and economic strategies in their country’s business environment.

Our children are the future makers of the country, so they have the right to know about the economy, politics, history, religion, society, etc. of their country. It is the duty of parents, teachers, and the government to teach important economic and financial skills to the people of the community from an early age and to help them become familiar with these topics and the necessary skills. Therefore, in this study, an attempt was made to briefly examine and explain many economic concepts and skills. parents, educators and enthusiasts, by using them, can take a big step in teaching this science and its skills to the children. Obviously, policymakers in the field of education can play a significant role in popularizing these skills by using such research. Because education is the best economic policy that can be implemented.

Keywords: Economy, kids,training, Iran

1-Introduction

Our children are the future makers of the country, so they have the right to know about the economy, politics, history, religion, etc. of their country.”

There are many reasons why children should become familiar with economics from an early age, perhaps one of the most important being that they will grow in this economic situation; Therefore, they need to know about the financial and economic situation of their country. Because the economy affects many factors, including inflation, interest rates, investment, unemployment rates, employment, financial benefits, university education, and employment growth rates, etc., which can be felt by the public, even children.

Children may hear in the family, news, school, community, etc. from the world’s major economies such as the United States, China, Japan, the European Union … as well as historical economic events such as sanctions, economic recession and inflation. But as long as they become familiar with economics in higher education (high school and college) (if their major is economics, finance, or management), they usually do not learn how economics works and what impact it will have on their current and future lives

But the important thing is that you may be asking yourself why children need to be familiar with these issues. This is a good question. Economics seems to be a purely academic science and activity that is very complex, but it should be noted that economics is not just about textbooks. Children face many economic factors every day, which they do not even know what they mean. So teaching economics helps children understand how the economy works. Because economics is almost a part of everything you’ve ever thought about

Economics is not just about studying money, it’s about studying everything that needs to be done with money, such as trade, savings, investment, profits, loans, taxes, and future forecasting, Perhaps one of the most important and fundamental issues. In economics, this is because of the limitations of certain resources, such as money, time, you can never get everything you want, and because nothing is unlimited, that means you have to choose.

Prices can go up and down, Companies can have good and bad ages, so it’s not always easy to predict the future of the economy without economic and financial knowledge and skills. But in a world full of choices, learning economics and finance can help you choose the best for yourself, your family, your community, and your future, and this will only be possible with continuous, long-term education from childhood to adulthood.

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2-How to teach economics to children

This section summarizes the most important things that children need to be taught, and some of the things that should be avoided.

2-1-important things for teaching economics to children

1-Use learning activities

One of the best ways to teach children is to stimulate their brains with fun activities. When you can stimulate a child’s brain in a pleasurable way, you increase your chances of understanding and retaining information in them. By doing this, you can teach children basic economic and financial concepts.

2-Have daily conversations

Repetition is the key to learning. This can help children understand and retain information. So talk to them regularly about economic and financial issues.

3-Familiarize them with the basic concepts of economics

First of all, you need to talk about the basic principles of economics, such as money and how to work with it, savings and its cause, investment, inflation and its consequences, loans and how to receive it.

4-Answer children’s questions patiently and simply

When you introduce children to economic and financial concepts, they will no doubt have questions. Some of these questions include:

Why is the economy important? What does the economy do for us? What will happen if the economy deteriorates? What will happen if the economy improves? What can be done to improve the economy? Or what is the role of me and my family in the economy?

5-Take the children on a journey

Sometimes the best way to learn a subject is to look at it. You can take your children on family trips that show or explain economic principles.

2-2-Observing the things that should be avoided

1-Avoid arguing in front of your children when there are financial crises and severe economic stress. Fear of overdue loans, unemployment, daily expenses, etc.

2-Use the financial crisis as an opportunity to manage your children’s expectations of material things. Teach your children to handle their pocket money responsibly in dealing with such situations.

3-Let them pay for their own needs. Doing so will help them understand the relationship between money and what they buy.

4- In difficult economic and financial situations, try to stay in touch with your family and friends. This will not only calm you down, it will also reduce your children’s fears and strengthen family values.

5-Financial worries can have devastating effects on children in the long run. Some parents stop supporting their children after financial and eonomic frustrations. However, in such situations, children need the most support so that they can make the best decisions in adulthood in the face of economic and financial problems. Otherwise, this cycle of escapism can continue for generations.

6-Share your financial and economic situation with your children according to their age. What you tell a child should be different from what you tell a teenager.

7-Children understand and interpret the situation more accurately than they are, so pay attention to their fears and anxieties when faced with different news, and talk to the family about the economic and financial consequences

8-Note how to explain the economic situation to children, and while not conveying your concerns about their financial situation, try to reduce their anxiety and relieve stress.

9-Pay attention to symptoms such as discomfort, stress, sleep changes, or appetite and nightmares in your children. Plan a family walk to reduce stress in the family or play a fun game with your children after dinner. These inexpensive activities not only distract your mind from economic problems, but also create a strong bond between family members.

10-When you feel like you can’t manage the bad economic situation in the family, contact a psychologist or other authorized mental health and economics specialist who can help you learn the skills and how to talk to your children about economic problems and so on. And give you a practical plan or try to read books about your problems.

3-Basic concepts of economics for children

Never forget that economics is not just about money. It also includes businesses and how they work

Economics is almost a part of everything you’ve ever thought about.”

But what basic economic concepts should be taught to children? How should this be done? What is the role of parents and teachers in this regard? Children deal with many economic terms on a daily basis, or even hear them in parental, news, and school conversations, but do not understand them properly. News, radio and television may talk about economic issues every 10 or 20 minutes. That’s why it’s important to talk to children about basic and everyday economic concepts and introduce them to simple concepts and objective examples with a little time, patience and study.

Therefore, in this study, Here are some common and basic economic terms that children deal with on a daily basis. It should be noted that the economic concepts presented in this article are in line with the standards of the National Council for Economic Education (NCEE).

According to this center, economic literacy is:

“Familiarity with the basics of economics – understanding some of the key terms of economics and knowledge of economics”

Table 1: Summary of key economic terms (for teaching children)

Economic TermNoEconomic TermNoEconomic TermNo
Lack of21specialties11Products / Products1
Opportunity cost22interdependence12servises2
money23productivity13consumers3
savings24Economic system14manufacturers4
investment25Economic cycle15Production resources5
stocks26inflation16Natural resources6
price27inflation17Human resources7
market28unemployment18Capital resources8
Supply and demand29govermment19enterpreneurs9
profit30tax20Production model10

4-The right ways to teach the value of money, savings and investing to children

But parents and teachers need to be familiar with the correct and up-to-date methods of understanding basic economic concepts such as money, value of money, savings and investment so that they can teach these concepts to children properly. For this reason, in this section, brief trainings have been reviewed in these cases.

4-1-The right ways to familiar children with money

1-Introducing the concept of money to children

To introduce the concept of money to children, start with coins and teach them the value of coins.

2-Play money games

        Play money games with children. This will help them learn about the concept of money

3-Savings account

Open a savings account and explain to the children how to do it.

4-setting goals

Encourage your children to know the purpose of the savings .

5-Pocket money

When children receive pocket money, they must learn basic skills and budgeting. As well as managing how they spend their money, they also learn the skills needed to save.

6-Let them make money mistakes

Don’t be afraid of your children making mistakes and let them make mistakes, give your children a chance to make decisions and pay for their decisions, even if it means that their mistakes are wasting their money. However, be prepared to give them the necessary guidance. This is a valuable learning tool.

7-Teach them long-term planning for money

Teach your children how to save and control costs to achieve their long-term goals.

8-Teach children how to plan and budget their money

Allow children to plan and budget for their money at a family or educational event based on the skills they have acquired.

9-Let the kids make money

Create opportunities for children to receive money for various household chores. If you want to pay them to do something, pay them a variable amount of money instead of a certain amount of money.

10-Introducing children to bank and credit cards

Explain to children how and when to use ATM and credit cards. Teach them how to shop with these cards.

11-Give children the right monetary gifts

Before giving a gift to children, find out why and for what purpose. So if you decide to go it cheap and risk the low bandwidth you are only fooling yourself.

4-2-Common mistakes in teaching money to children

1-Mistakes in behavior modeling

Even before going to kindergarten and school, children will learn from you, even if you haven’t said a word about it.

*-solution

It’s best to be a good model for your children throughout their lives. They will follow you from childhood. So the best way to teach children is to do good things. So if you want your children learn saveing, The first step is to do it.

2-In the family, only the father pays

Children are very smart and easy to understand and remember that when they are out with their family, it is the father who does all the payments and controls the expenses, and the mother has no role to play.

*-solution

Teach your children from an early age that the financial and economic affairs of the family are done by the parents and their cooperation.

3-With bank and credit cards, you can always buy whatever you need, regardless of your budget

Many of the finances of our lives are now invisible, as we do them electronically and without the spectacular exchange of cash. So you need to teach children to receive and pay electronically and show them that these cards contain money that you have earned from doing something and have a monetary limit and will eventually run out.

*-solution

familiar children with bank cards and credit cards. Explain that the money earned from doing something is automatically credited to your bank account. (Explain more precisely to older children that taxes are levied on these amounts) Show them that any money you withdraw from the ATM or pay off your debt using a bank card will be deducted from this balance and will no longer have the value and credit to pay for purchases after completion.

 4-Don’t talk about money in front of children

According to research, 71% of parents are reluctant to discuss financial issues with their children. They believe that children do not learn anything from these conversations because talking about money is inherently bad and embarrassing.

*-solution

Talking about money is a daily occurrence. Let the children be present in your financial conversations. It is necessary when parents do not want to buy a product that is expensive and cannot be bought due to lack of money. Children should be present and allowed to comment.

5-A man (father) has to shop regularly and return home with several shopping bags every day

You don’t have to plan your expenses. You can buy whatever you want today and think about it tomorrow.

 *-solution

When children reach the age of 5, they can “understand the messages” before making a purchase, so when you talk about delaying shopping, you teach your children that you can’t buy every day or every time.

6-Children will suffer when they make money mistakes

Miscarriages will have no consequences for your children as long as you teach them how to deal with them.

 *-solution

Let them buy or even invest with the money they have. Sympathize with the mistakes of the money they make and explain to them what was the reason for their mistake in this purchase or investment. But know that your sympathy for compensation or redemption is nothing else, because they need to understand that they are responsible for their mistakes.

4-3-Teach children to understand the value of money

It is very important to teach children why and how they should save, but how you can convince children to spend their money on the future and the difficult economic days, when they do not have ability of money planning for saving. It’s not easy, but it can be achieved with training and planning.

-The relationship between work and money

Do your children think they made money from an ATM? Or are parents whose children think their parents are money printers who have to constantly give them money under any circumstances to meet their needs?

 Any child without education and financial skills, as well as children who have never been forced to work or have witnessed what their parents have to do to earn money, can have the above irrational assumptions.

There are different ways to teach children that the money they receive depends directly on what they do. One way to achieve this goal is to create a table that contains a list of household chores along with the amount paid for each task, and ask your children to receive a sum of money from your list by doing anything at home. It should be noted that this should not include personal work and should teach children to save the money they earn from doing various chores at home in a box and tell them, when they ask you for money to buy toys or anything else, Use your own saving. This will let them know that they need to buy the equipment they want from the money they have earned.

4-4-teach children how to save money

*-3to 8 years old

-The first piggy bank is for saving

Explain that the “saving” glass piggy bank is only for buying things she or he may want to buy in the future.

-The second piggy bank is for costs

Explain to your child that “cost” glass is for immediate items such as buying a candy bar or snacks from a grocery store.

-The third piggy bank: ” for helping the poor peaple”

Explain to your child that this glass piggy bank will be spent on charity, helping poor people and animals.

*-8 years and older

But how to teach children 8 years and older to have the skill of saving is something we have to do differently. From this age, it is time to introduce them to opening a savings account in a bank. That they can deposit their savings in a bank account. So take them with you to the bank and teach them how to open an account and how to deposit.

4-5-Teach children how to invest

*-Age group 8-11: Basic training

This age range is a good opportunity to start forming an investment idea. What is investment and what does it mean

Explain to children that investing is a way to make more money with the money that you have. If they know math and percentages to some extent, explain the interest rate to them. If they lend a certain amount of money to someone, his money will be returned to him in a few percent.

Now you can explain how a bank pays interest on the money it has given to the bank. This is the first and simplest way to encourage most children to save and invest.

 *-Ages 12-15: Learning about the market

At this point you can start introducing the stock market. Explain what stocks are? How is stock value based on company performance? If a company has more revenue this year than it did last year, people want to buy more shares in that company, and that’s when the value of the company’s stock will increase. You can also get acquainted with the stock market and explain the trade in this market. These training activities help them track and predict a company’s stock value based on the company’s previous data.

*-Age 16-18: Learning about business

At this age, teens are likely to take advanced math and economics courses, and it’s time to invest in the real-world stock market for short-term and long-term .

The best way to do this is to participate in the simulated buying and selling of stocks and gain the necessary experience in buying stocks and forecasts, and then invest in the stock market with a small investment.

 Let them gain the necessary experience with small capital and start again if they fail. Monitor them so you can give them the guidance they need.

At school, teachers can teach students how to invest in the stock market on a practical basis after learning the basics, and even ask them to do in groups

So try to ask your students to make a small investment in the stock market with their parents on this site and present the results in the form of a class report.

5-Teaching economic concepts with objective and real stories with economic themes.

Try to teach children the basic concepts of economics that were briefly discussed in this research in the form of stories and objective, real and economic examples with environmental themes around the environment and ask them to listen to these stories well and pay attention. Answer the economic concepts taught to them, answer the questions you ask, discuss the issues with you and your friends, and express your views.

It should be noted that try to teach the basic concepts of economics to children and students carefully and patiently, because economic concepts have a special continuity that should be explained and taught in their place.

Conclusion

:Tony Blair

“Education is the best economic policy that can be implemented”

Economics is almost a part of everything you’ve ever thought about. Economics is not just about studying money, it is about studying everything that needs to be done with money, such as trade, savings, investment, profits, loans, taxes, and predicting the future.

Many economists and researchers believe that in order to have a dynamic, efficient, and entrepreneurial society, economics and finance must be taught to people from an early age, because it can guide them in the right direction of investment and entrepreneurship. in most developed countries of the world, including the United States, many economic and financial concepts and skills are taught to people from childhood, because in the future they will need this knowledge and skills in any job and situation. There are many reasons why children should become familiar with economics from an early age, perhaps one of the most important being that they will grow in this economy; Therefore, they need to know about the financial and economic situation of their country, because with this skill and knowledge, they can adopt appropriate financial and economic strategies

Our children are the future makers of the country, so they have the right to know about the economy, politics, history, religion, society, etc. of their country. It is the duty of parents, teachers, etc., and the government to provide important economic and financial education and skills to the people of the community from an early age and to help them become familiar with these issues and acquire the necessary skills. Therefore, in this study, try to briefly examine and explain many economic concepts and skills. Parents and enthusiasts, by using them, can take a big step in teaching this science and skills to the children. Certainly, education policymakers can play a significant role in popularizing these skills by using such research and helping the growth and excellence of future generations.

reference:

Book

khanalizadeh, bahman (2020), kids and economic, Narvan Publications, iran

ISBN: 978-622-95345-8 -8

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