Every child is precious and every parent wants to provide the best for their child. But with changing times, it is also very important to teach your child the value of money.
Back in the days there weren’t many gadgets and outdoor activities was the way of enjoying life to the fullest. But now there are classes for every extra-curricular activities and it’s kind of become a must to enroll for them. Everyone needs their child to be the best at whatever he does, academic or otherwise, and hence teaching about money and its value somewhere takes a back seat.
I have tried to put it down in 2 parts, which should help you teach your child the value of money:
1. Distinguish between want and need
Today there are many materialistic things which attracts your child and in effect makes you buy them for their happiness. If you can make your child understand the difference between a want and a need, half of the problems are solved.
This is an exercise both for the child and the parent. Don’t be emotional just because your child has a sad face. Be firm and ask yourself first whether your child wants them or needs them. Then ask your child the same question but gently. Trust me the answers will amaze you. Make them aware that there is limited amount and you can only purchase on eof the two things that is wanted, then let the child choose and prioritise.
2. Money Management
Depending on the age, the manner of teaching will differ.
If your kid is less than 10, then the old tried and tested piggy bank does the trick. Give them coins to put and when it is full make them buy things they need themselves.
When you go to a mall let them choose what they want to buy and make them realise the price paid by letting them the money to pay for it. This should also be done for small things like buying popcorn at theatre or when you are out to have a meal.
Play traditional games like Game of Life. It’s a fun exercise to make your child learn about saving and also spend quality time as a family.
Give the pocket money for canteen and small purchases. Let them make mistakes and learn.
Between 10 – 18 – Take them shopping for groceries or to the Bank or ATM, show them how money is withdrawn, teach them banking concepts by showing their cheque book with their name on it and passbook and make them understand the money you have saved for them, show them their investments and how they are growing. Let them be the part of their own financial journey.
18 and above – Phones and gadgets attracts this age group a lot. Let them accumulate for it by saving small amount out of their pocket money. You may also introduce the concept of borrowing, budgeting, patience etc..
These are small concepts but they get imbibe in your children and allows them to make sound financial decisions.
The Author is Founder, Fasttrack Financial Planners
