In the latest episode of MoitePari TV, Rositza Vartonik from the Financial Literacy Initiative (FLI) and Deyan Vasilev from MoitePari discussed the importance and the need to help children develop personal money management skills from an early age, as well as the challenges posed by the digital environment. The main highlights of the conversation included:

• If we, as parents, are not financially literate, the chances of raising a financially literate child are rather low.

• Financial literacy is a fundamental life skill, because whatever our children choose to do in the future—regardless of their profession, whether they become entrepreneurs, employees, or freelancers—they will need to be able to manage their money.

• This is even more important in a context of increased personal responsibility for one’s own well-being, low predictability, and the high dynamism of the world in which children are growing up and will live. Managing money in such an environment is a challenge, which is why it is essential to start building skills, knowledge, and habits at an early age.

• The pandemic significantly accelerated the process of digitalization. Both children and adults began using digital products and services much more intensively. Alongside its many benefits, digitalization also brings certain risksthat need to be addressed—cybersecurity being one of them.

• Digital financial education does not only mean using digital technologies as communication channels. It also includes raising awareness and providing education about digital financial products and services—their nature, benefits, and the risks associated with their use. Increasing awareness of cybersecurity is also an integral part of it.

• One of the first steps is to start a conversation with children about the difference between a need and a want or whim. For younger children, saving using a transparent piggy bank with a picture of the desired item is particularly effective. Through this purely visual approach, children learn to set goals and are motivated as they see the saved amount grow.

• It is not advisable to give pocket money day by day. This does not help children learn how to plan their spending or budget. If this is challenging, parents can start with shorter periods—giving a fixed amount every 2–3 days—and gradually extend the interval.

• Teenagers present an additional challenge, as the pressure to consume is even stronger—coming both from their peer group and from the digital environment with its targeted marketing messages.

• It is important to talk to children about money management from the perspective of shared family goals and how these goals can be achieved through financial planning.

Watch the full conversation!