Teaching Kids the Importance of Money

Money is one of the most important aspects of our lives. It is the primary medium with which we transact with our surroundings. But money isn’t available in abundance and has a tendency to change hands too soon, and, thus should be used wisely. Its righty said that money doesn’t grow on trees; it is to be saved for the future. Investing money makes sure that its growth continues unhindered and the future of the individual and her family becomes secure.

The art of financial discipline helps individuals to achieve their financial goals in a structured manner. This art should be learnt from very early on so that the gains can come sooner, thus, giving your money more time to grow over the years. Even children should be taught about financial control so that when they are of investing age they are ready with a reasonable degree of investing knowledge.


Parents generally tend to give lesser importance to imparting financial education to their children. They think, taking financial decisions is the prerogative of the child when she attains adulthood and is independent. Little do most of the parents realize that if the child is being taught the importance of savings and investment at a young age, it will help him in better organizing his own finances in the future.

Every day we come across various advertisements in the media related to money and various investment avenues. The children, having keen and sharp minds, register the terms in their memory. In such cases, it is easier for the parents to explain about money to their children since children already have an idea of the terminology. For instance, “Mutual Funds Sahi Hai” advertisements on TV must be making children ponder as to what mutual funds are. This provides a ready ground for the child to learn.

                                        Mutual Funds Sahi Hai advertisement campaign on TV

Sometimes, parents themselves lack the specialized knowledge about various financial topics. In that case, they can take help from professionals. Just the way we make our children attend tuitions for the subjects they don’t understand properly, similarly emphasis should be given on financial education as well.

Parents should teach & allow children to decide their own financial goals, short term as well as long term. They should explain to the child about various available options to save and invest money and how these work. Lessons should be taught on the basics of interest rates for the child to understand how money grows.

For example, for a 15-year-old kid, buying roller skates worth Rs. 5000 can be a goal. Given his pocket money of Rs. 2000 per month, he will be able to buy them in 5 months from his savings; assumingly he saves Rs. 1000 per month and spends Rs. 1000 out of the total pocket money. Such goal setting can help the child take fast steps towards financial maturity.

Parents should also start an SIP in the name of their child, share the monthly statement, and discuss the performance of money with the child. The kid on seeing her name on the statement will be more indulged to learn and the control will still remain with the parents.

It is imperative to make our children confident and independent in terms of financial education. And for that, you need to start early, start now!

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