How to teach children the value of money?

Author
Akanksha Gautam

“Thank you Daddy” or “Thank you Mummy” can be the best things to hear from your child and arguably that is the main reason every parent strives for, to provide the best of everything to their children but how expensive can these words get?

As parents, it is not uncommon to pet children and provide them with everything they set their eyes on, which may or may not be of any utility to them. Education or food being the most prominent things, all other expenses end up being eye candy for just a few days or hours. So is it right to treat a child with everything they wish for? or trick a child to not spend on unnecessary things? Well the answer can sound a bit harsh but it is always good to say “NO”, this might make a parent a villain in the eyes of a kid but at least it will not pave path to irresponsible spending. Once it becomes a habit for the child to cry and achieve things then you better have money growing on trees because the wants can never end.

As parents, you do everything to see them successful, send them to best schools, provide with extra tuition, encourage their hobbies and sports but among all this most of them tend to forget to imbibe key skills of life and that’s right one of them is Money Management. Schools or play homes are not going to help in this and the practise has to start right from home. So here are 5 things to help your kids understand money in their early days!

1. Right back to the basics: “The classic piggy bank” it really need not be in the shape of a pig. But any small coin box /pouch or even a small container would do to help children understand that saving can help money grow (Investments can become tough for children to understand). It can start with small amount in the form of pocket money but eventually it helps them understand that saving can help them accumulate money to buy whatever they want.

PRO TIP: Have you tried making your child save for a toy he/she loved in a shopping mall? Try to make children wait and accumulate the money for buying the toy. The income sources might be small chores, pocket money, festive season gifts or even gifts from grandparents.

2. Make sure your kids are good at math: This doesn’t mean they have to be whiz kids in math but basic addition, subtraction, multiplication and division functions can help them understand how money can be counted or calculated and this can be a great introduction to math if the kid hasn’t started school.

3. Let your child do the spending: Has it happened that you go to a mall with your child and end up returning with empty pockets? Try this, next time you step into a mall give your child a budget to work with, probably 100 or 500 based on their age. They need to know that there is no unlimited supply of paper with Smiling Gandhi on it and let them decide what they want to buy. This also helps them make choices and sacrifices.

4. Work to earn it: You might not like to see your child do any work and would prefer a housekeeper or maid servant to do all that. But rather than having your child glued to a smart phone or tablet the whole day, it would be a good habit to do some household chores, small activities like groceries shopping (if the child is old enough), cleaning their own closets and arranging books can also go a long way to make them understand that there is no free money, you also have an added bonus of keeping your house clean always. For every work done a small amount can be paid to them so they can use that as an income to fill their piggy banks or for something they want to buy.

5. Talk money: It is important to let your kids know that there is no unlimited supply of money in your wallets and it is not freely printed in an ATM box, once you know they can understand things (at the age of 10-12) this is the right time to explain a banking system and what you work to earn that money. Some parents might feel talking money to their children might be a bad thing as the child might start feeling they are not well off and refrain from asking the things they like but don’t you think it is a good habit to develop? It is probably one of the best habits in regards to money if they know what they can afford and what they cannot…

In the digital world of cards, net banking and mobile apps try implementing these before children start to believe anything can be bought with a piece of plastic card in their parents’ wallets. Be a parent who has successfully provided financial education, be a parent who has taught the child how to lead life.

 

About the Author
Akanksha Gautam
Akanksha Gautam is approachable, enthusiastic and ready to inspire you with confidence when it comes to your money, your priorities, aspirations and concerns to develop an achievable plan for your future, in short she is here to give you the diligent and relevant advice you need, so you can make the best decisions for you and those you love.

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