Have you started talking to your kids about money? Here’s why you should teach your children about personal finances at an early age.
Kids are way smarter than you anticipate. In fact, children grasp knowledge faster than adults. Their shaping years are the perfect opportunity to teach them about money management.
School curriculum may not have finance lessons, but you can take the initiative.
Today’s small money talks are going to help them in the long run. So let’s explore simple steps to teach your kids about money.
Introducing your child to the currency can be your first step.
You can try a simple fun activity. Ask your child to separate the coins and notes of up to Rs. 50 to begin with.
Kids learn basic additions/subtractions very early in their school curriculum. You can ask the child to add the total money.
That way, your child will understand how to use the money they have.
Take your child with you for groceries and vegetable shopping. That would be the right place to show your kids how to buy things with money.
Children love it when you ask for their opinions. Maybe, you can make them select a vegetable or a fruit of their choice. Encourage them to talk to the shopkeepers about prices.
Your regular mode of payment could be credit cards or UPI. But, for the sake of your child’s understanding, you can pay with cash.
That way, your child will understand how to pay and get the change back from the shopkeeper.
This fun supermarket activity can teach your child the real-world usage of money.
Money saving is crucial learning that’ll stay with your child forever.
These days, various banks offer special banking for children to learn the whole experience. Parents can take responsibility for the bank account and set transaction limits.
But you can start with a piggy bank.
The remaining change from the shopping you did together can go in the child’s piggy bank. Make your child understand the importance of saving money.
You can also set a milestone. For example, if your child is asking for a new toy, make them save for it. That way, they’ll value the money and the new toy. The delayed gratification will give them much more joy.
Kids replicate their parents’ behavior in every possible scenario. It won’t set a good impression if you fulfill their demands every time.
As much as you want your child to have every happiness in the world, you’ll have to be reasonable.
Not just toys, anything that you buy will attract your child’s attention. It is crucial to make them understand the importance of wants vs needs.
You are giving your child an allowance for their day-to-day needs. Instead of deciding the amount yourself, sit with your child to make a budget.
Together, you can write down what they might need to buy in a month. Create a list and set the appropriate budget.
That way, your child will know how to manage their allowance. The budget list will give them a clear idea of how to carefully spend the money.
6. Plan for Your Children’s School/College Fees
The concept of teenagers earning some money in summer vacations isn’t common in India. That decision depends upon you and your child.
If your teenager wants to earn some money to save for college, that can be a good idea. Otherwise, you can sit with your child to discuss school/college fees.
Making them aware of the education cost is important. If your child wants to contribute, you can help them figure out safe and simple ways to earn money.
Note: This subject can be tricky to handle. Kids might spend the money they earn carelessly. On the other hand, it can also teach them the importance of hard-earned money. So you may want to proceed with caution.
Accompany your children in their financial journey. From teaching them to save money to helping them kickstart their investment portfolio when they grow up.
Academics may not teach your child real-world finances. So you and your child together can navigate the world of finances by researching or talking to experts.
Talk about finances in your family. Make everyone involved and take everyone’s opinion into consideration.
You can consider hiring a financial advisor for your family who can help you set goals.
When was the first time you started learning about money management? Maybe your relative gave you some money to buy ice cream. Or your grandparents gave you coins to put in your piggy bank.
The small things you do with your money early in your life can set the base. That’s why it is important to talk to kids about money management.
It’s never too early or too late. You can begin today, even if your child is 18+.
Gaining financial knowledge and having financial goals define your lifestyle. And you can be your child’s finance friend.
If you want more guidance on personal finance and investments, give VNN Wealth a call. Our advisors would be happy to help you.
