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Long ago I was talking to a friend in my daughter's school. My friend is a mother to a boy one year older than my daughter. Her family was going through a financial crisis. She told me how her husband's careless handling of money brought them to a deplorable financial state. She was of the opinion that the kids should be taught to handle money while they were young. In the beginning of the month, she started giving her son a fixed amount and he had to use that money for all his expenses. Be it his friend's birthday party and he wanted to buy a gift or be it a game he caught fancy of. He had to spend his own money. If he spent all the money before the month end and he wanted to buy something he had to wait till he got his next allowance. And she told me how had she started sending him to nearby grocery shops to buy stuff. I realised that I was lagging behind in educating my darling daughter about this most important aspect of life. So I geared up to talk to her about money. Are you like me? Or are you an enlightened mum who is already discussing money matters with your child?
Money or wealth is one of the most important factors if one wants to live a fulfilled life.As schools don't have a subject related to the handling of money, the onus to educate the children about the value of money lies on the parents. The value of the money is to be taught early to lead a successful life.The children must know how to spend wisely and save for future. They should know the difference between what is necessary and what's not. In other words the difference between needs and wants.In the present times when both the parents work, they have less time to spend with the children. In such a scenario, parents try to make up by buying everything their child asks for. Although this type of pampering isn't good yet I have seen a lot many parents doing the same thing. They buy all the things the child asks for. Spending money is equated with love. I don't say we shouldn't pamper the children. We don't want to deprive them of anything. Do we?
Anything in excess is toxic. So next time your child asks for one more barbie doll, tell her it's far too expensive and she already has enough dolls.Most of the parents are very particular in training about manners and road safety rules then why can't they talk about saving and spending. Here are some ways which will be helpful if you want to teach your child to organise her own money.
Start as soon as they learn to count. A piggy bank to collect the coins and counting them at weekend can be a good recreational activity.Buy a game of Business which has fake currency notes.Play with them and talk about how to handle cash.
As they grow up, talk about the difficulties you face in the workplace. Children should know that a lot of hard work is invested in earning money. Therefore, they must spend it wisely.Talk about how you are saving money to buy a house or a car. Most of the parents avoid sharing the money related problems with their children. Parents should talk freely about their experiences, values and beliefs about money. Everything should be explained keeping the child's perspective in mind so that she can understand it.
Parents can fix a monthly allowance as the child grows up further. And allow them to keep the money they get from relatives on different festivals and occasions. Help them to budget their pocket money and if they want to buy a game or a bicycle tell them to save for it. A bought her new sports bike with money she saved from her monthly allowance. She buys gifts for me and her father on our birthdays and anniversary. I just love her confidence when she says 'Take whatever you like, mum. I will give you money when we reach home."
Be careful of how you spend money. Parents are children's first teachers. And the young ones learn by observing the adults. Shopping shouldn't be treated as a leisure activity. Parents can take the children with them on weekly shopping expeditions. This will teach them to compare prices before buying.
Allow them to make mistakes and learn from them. If they finish their monthly allowance early, be strict enough to let them wait for the next month to buy that chocolate or the footwear.
Be gradual and patient while trying to inculcate healthy spending habits. Not everything can be learnt in one day. Children take years in imbibing good habits. But once learnt,healthy money habits will help them to grow up into financially mature adults. How are you planning to educate your young ones about money? Do share.