The lack of financial literacy among today’s youth is quite prevalent. As a result, most people end up making terrible financial decisions when they grow older.
This isn’t because they’re not smart; it’s because they did not have the knowledge to help them avoid these mistakes.
A large percentage of the young population has zero understanding of finance and economics. Many avoid paying attention to the constant rise in debts and keep spending money on unwanted things.
It is crucial to sit your child down and explain that credit cards do not mean free money.
One of the best ways to make sure that your children get a better understanding of how to handle money is to start their financial literacy early on; the sooner, the better.
While there are many things that parents can teach their children about how to handle money, how to save and budget etc. It’s great to have some help, and this is where KiddieKredit comes in. Let’s take a closer look at what it is.
What is KiddieKredit?
KiddieKredit is a free handy mobile application that tracks daily chores. The best way a kid can learn about credit is by experiencing how it works. The premise of the application is relatively simple.
The better the child accomplishes daily tasks, the higher their credit score will be. The entire algorithm parallels basic FICO models and then decides on how much the kid will get. It can either be monetary or non-monetary.
How Does Kiddiekredit Work?
- The basic idea of the Kiddiekredit app is simple. The kid will mark off each chore after completing it and the parent will either accept the submission or deny it at the end of the day.
- Each task the child finishes will add up to a calculated weekly kredit score.
- This score will establish how much of their weekly allowance they will receive.
- The child will tick off each chore in the app once they are complete.
- However, the final decision lies in the parent’s hands.
- They will determine whether the work is up to their satisfaction or not.
- Each task adds up towards a kredit score.
- After each week, their score is calculated.
- Weekly allowances or rewards can be given if the score is satisfactory.
- Setting a fixed value for each point in advance is a good idea. For example, a single kredit can be counted as one dollar.
How Can Your Child Utilize the Credit Score?
The child can opt to save this for some form of reward which can either be of monetary or non-monetary value. The way the child utilizes his kredit score will essentially factor in how their score is determined for the following week.
If the child uses a large number of rewards, it means they have used too much of their credit. Thisis harmful and can damage their score.
Who Can Use The App?
KiddieKredit is an excellent way to educate your kid about savings and the importance of credit. It also teaches them to complete their chores on time.
Besides, this application also shows parents additional ways on how they can make better credit conscious decisions in the future.
The Benefits of Learning Financial Literacy Early On
A child who doesn’t have the proper mindset about money and credit might think that $1000 is probably the most substantial sum of money for them. It is crucial to ensure that your child has a realistic attitude towards money, and how it is used effectively to run an entire household.
It is vital that the child understands about real figures and how it the money is earned. The KiddieKredit app is an excellent way to break down financial literacy and make it appear less complicated in the eyes of children.
They Learn To Save
Being financially literate shows children the importance of how saving money today will be useful in the future. Children who understand the value of starting to save early will have an advantage over those who don’t.
It is also vital that a child understands the difference between wants and needs. Make it absolutely clear that needs are necessities that are crucial for living, while wants aren’t really needed and those are something they can do without.
Once a child becomes financially literate, he/she knows that necessities like food, water, shelter, and clothing are a lot more critical than items like designer jeans or vacations. Expensive items should only be bought only once all basic needs have been met.
The KiddieKredit app is a great way to get your child started on financial literacy. The app is fun to use and interactive, so children don’t feel that they are being compelled to learn about money and finance.
Financial education can equip & empower young people with the right skills and knowledge and give them the confidence to take control of their lives and build a very secure future for themselves as well as their families.
If you want to know more about Kiddie Kredit, don’t hesitate to contact us today. You can also download our app and try it out to see if it suits your requirements.