"The formation of habits is education, and education is the formation of habits."
Charlotte Mason, Home Education
As we have usually done every year for the past few years, we opened Aya's coin bank. She has been saving up for the whole year from the money gifts she received, her earnings from her cookie sale, and her weekly allowance. We studied the kiddie book of The Richest Man in Babylon and we have been practicing the somw of the principles of proper money handling. Every now and then, I include this book in her afternoon free reading basket. There is a tracker at the back of the book where she colors in a coin and if shw gets a certain number of coins, there's a star.
I find this yearly activity very much enriching in her financial literacy. As a kid and a young adult, I always thought the reason we were poor back then was that we do not have enough money. That my father wasn't earning enough and that my mom wasn't making enough money too. I often heard my Ma and Pa before argue about not having enough money for our needs let alone our wants.
When it was my turn to manage our finances, I learned that the problem is not about not having a lot of money. It is how well one manages the money they have. Now I learned this late in life. I had to go through the painstaking journey of freeing myself from debt. I read somewhere that parents should teach their kid early the things they learned late. Simply put, we need to give them a head start on learning the vital things they need to learn in life.
I took this yearly activity with my daughter as an opportunity to recall some of our lessons about basic math. Counting money in itself is something that every child needs to learn. Her coin bank contains bills of different denominations, 5 peso coins, 10 peso coins, and 20 peso coins. There's the occasional 1 peso and lower value coins too. Our 5 peso and 10peso coins here in the Philippines have different kinds. I had her organize the coins and group the likes. We then stacked 10 coins for each of them. We did the same with the bills.
Next we counted and added the money up. Shen used her abacus to calculate. She somehow looked like a businesswoman in the olden times computing the day's earnings through her abacus. There were some parts where she got confused but once that was cleared, everything went smoothly.
For the past few years since we started this in 2018, she saved up around 2k to 3k a year. This year, she made more than that. She saved more than 5k. I'm not surprised because she had a few batches of cookie sale early this year aside from her intentionally saving up for her future self as she would say.
The most interesting part was when I asked her what she would like to do with her money. She needed a few minutes to think about it. As I was wrapping the 10-pc stacks of coins, she came up with the things she wanted to do with her year's savings:
- She would put some in the bank. She told me she's not gonna do anything with it because it's for her future self. I gave her a brief introduction of interest rates. She got the gist of it because she read in the Richest Man in Babylon about the 3rd law of money which is making your money work for you. She still has more to learn about this but for now, we just put it at that.
- She allocated a budget for the Christmas gifts she wanted to give to the people on her Christmas list. For this year, I asked her that she make a Christmas list that has the names of people she wants to give gifts to, not the list of things she wants to received this Christmas.
- The last portion of her money was to be put in her wallet. She said that it's for when she finds something that she might want to buy.
She may not have realized it, but she practically just made a budget plan with all the important components. She has savings, expenses, and emergency funds. It's never too early for kids to learn how to manage their finances. And these little things that she does right now forms a healthy habit and a healthy relationship with money.
I see her first learnings about money management in full swing in this year's coin bank activity. Charlotte Mason's method of teaching says that narration is an essential tool in learning. And it is, especially in ingraining the lesson not just in the children's minds but also in their hearts. But application embeds the lesson in their life and they will take whatever they learn at a young age to their adult years.
