When do we exactly introduce our kids to financial education? Is it when we let them keep the money they get from relatives?
By Harshad Chetanwala
When do we exactly introduce our kids to financial education? Is it when we let them keep the money they get from relatives? Or when they first plan to go out with their friends for dinner all by themselves? It’s actually much before. The time they ask for a toy and we as parents then incentivise them to do something more exciting. Also, when they waste their food and we tell them it is bought with hard-earned money and we shouldn’t waste. These small habits inculcate values from childhood. Here are some ways to help you make your child financially wise.
Ages 3 to 5
So, this is the time for you to first accept the fact that it’s about time for your child to get introduced to money matters. While this is the age where they are all cute and adorable, it is also the age when they understand the concept of “buying” and “money”. We need money to buy things, and we have to work to get money. This just becomes easy if you add some fun factor to this activity. Make a deal with them. They have to earn happy points with good behaviour to get that big burger or that Disney Princess dress. It could be 100 points for a burger and 500 points for the dress. Money could be used to help them learn counting.
Ages 6 to 12
They are already going to primary or secondary school. They need allowances. Their demands get bigger during this phase. Things around them will influence their choices too. The outrageous amount of pressure schools today put on parents to be ‘socially’ competitive will have its impact on the child as well. They might want branded clothes and expensive stationary. Make sure you take sensible decisions in their growing years by letting them understand the value of money.
Games like monopoly can make your task easy. Encourage such games and play with them. This is a perfect time to open a bank account in your child’s name. Their own bank account will motivate them to save money. Make them live a simple lifestyle. Remember success starts from humble beginnings. This will help them as adults to manage their money better. Save more.
Ages 13 to 18
This is the age where parents are either friends or foes for their kids. They are new to the world of fashion and gadgets and these are their best friends now. With such fancy hobbies come significantly higher expenses. In order to make them financially wise, involve them in family talks about finances. Ask them for their views. At this age they are already preparing for their higher education. Discuss the finances with them. Explain cost of college fees, student loans and credit cards, etc. This will raise awareness and make them financially vigilant.
This doesn’t end here. Going forward, when they get their first pay cheque, a good investment advice from you will help them generate wealth for the long term, even better, forever. Remember the quote: Give a man a fish and you feed him for a day; teach a man to fish and you feed him for a lifetime. The man here is your child. Remember, starting early always helps, be it for investing or even educating your children about investing.
The writer is head, Customer Delight, Quantum AMC