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Teaching your kids the value of money is perhaps the most important job you’ll do as a parent. Saving money is a hard lesson to learn for anybody; however, when your kids learn it early in their lives, they’re more likely to make smart financial decisions when they’re older which will save them from costly money decisions.
Wondering where to start? From offering them their own savings account aka piggy bank to letting them earn money, here are four simple ways that will help you teach your kids the value of money:
A child will always ask for chocolates, chips, toys because that’s what they want. They don’t understand the needs - food, shelter, clothing, school fees, etc. Help them understand the difference between the two and how budgeting helps them achieve both in due time.
Parents must teach their kids the value of saving right from a young age. Gift them a piggy bank which is the child’s equivalent of a savings account. If your kids want a toy worth Rs. 200, show them how each time they put money into their piggy bank, they get closer to the toy’s price. Say your kid earns Rs 10 after he/she helps you do the dishes, once he/she puts the amount in their bank, you add Rs 5; this teaches your kid the value of interest. Step by step, your kid will earn Rs. 200.
At the start of each month, when you and your partner sit down to prepare the budget for the month’s household expenses, include your kid into it. When you’re listing all the items and the quantities you want or whether to pay bills via debit or credit card, ask your kid about his/her opinion. If they say, “Let’s buy 20 chocolates”, teach them it’s better to buy two chocolates each month. This way they not only save money but can buy different brands each month as per their liking.
When your kid grows up, money will run online more than 99 per cent. Children need to understand the basics of digital money from a young age. Open a savings account for them. You can try the Minor’s Savings Account at IDFC FIRST Bank. Here, when you deposit money into that account, show them how you do it. Comparing credit cards online? Keep them next to you and ask for their opinion, the more they’re exposed to digital money and finance, the quicker they’ll learn.
Instead of giving your kids pocket money, let them earn it. Tell them you’ll pay Rs 10 each time they help you with a chore. It could be doing the dishes, helping you fold the clothes and keeping them in the cupboard or cleaning the house. This way they’ll understand the effort that goes behind earning each rupee.
The more you educate and encourage your kids to understand and learn about finance and budgeting, the sooner they will be able to handle their own money like a pro!
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