The statistics about financial literacy are in, and although they vary slightly depending on the source, the general results are not good: The majority of kids show they are interested in and want to learn about money, but they are woefully behind on being able to answer even basic financial questions. Many financial experts are proposing getting finance into schools as a standard part of the curricula, but critics point out that, even when these courses are already implemented, kids aren’t necessarily doing much better on money issues. That could be a problem with the course content and delivery method, of course, but it also could be the simple issue of needing real world practice in applying the information.

What does practicing financial literacy look like? 

Practicing financial literacy is just going through money tasks on an everyday basis. It involves, for example, balancing a checkbook, making a payment at a grocery store or comparing products online. It also involves looking at savings or investing. Anyone can practice financial literacy, although the types of tasks a person completes is based on his age and experience – a preschooler, for example, might not be ready to understand the complexities of a mortgage, but he might be able to count coins and put money in a piggy bank for something he wants to buy later.

Why is it so important?

From a purely physical perspective, the more a person does something, the more neuropath ways related to that behavior develop in the brain. This makes it easier for the brain to recall the information it needs to go through the process again, and over time, a person gets more efficient and faster at doing the activity. Understanding this, if you want your child to have an easy time handling money, you’ve got to train his brain to be “in shape” for the tasks.

Connected to this is the idea that memory connects to emotions. In short, the brain will recall an emotional response first, simply because always relying initially on logic can be too dangerous in certain situations, such as if a person is being chased by a wild animal. It then moves to rationalization to sort things out. Without the experience of going through a money task, it’s much harder for a child to feel much emotional about it, and that means the experience – and, therefore, the financial lesson or concept – is much more difficult for him to remember and assign importance to.

Overall, the way the brain develops, coupled with the fact emotional experience is necessary for good memory recall, means that without practice, it is very hard for kids to turn financial tasks into excellent habits that will serve them through the rest of their lives. For handling money to feel natural, you have to let it become automatic, and that only happens when the brain is comfortable going through the necessary sequences. Put another way, without practice, kids will probably always see money as a challenge.

And let’s not forget that, with practice, kids gain the opportunity to hear something positive from you. Each time they complete a financial task properly, you can provide praise. That ultimately boosts their confidence, giving a positive emotional memory that helps them remember what you’re trying to teach!

If you still need one more reason to let your kids practice finance early, consider that, every time they try their hand at a financial task, they get a result, be it good or bad. Subsequently, they always have the chance to analyze what happened. If you guide them through the analysis process, they’ll quickly learn to pick out problem areas and make modifications to what they’re doing, ultimately honing their critical thinking skills and yielding a better financial result.