FINANCIAL AWARENESS IN KIDS
· Most parents don’t know how to talk to their children about money.
· It is important to dispense such information in their formative years.
5-6 years
· Introduce the concept of money to children by exposing them to it through a fun experience.
· Give the kids coins and ask them to sort these by size or thickness.
· Help them distinguish bank notes by their size, colour and numbers written on them.
· As they learn simple counting, get them to do it using coins and notes.
· However, never force the child into any financial activity to avoid developing distaste for it.
· Also explain why you didn’t buy them an extra toy while you purchased a dress for yourself.
7-9 years
· This is the right time to buy a wallet and a piggy bank.
· Keep the wallet for the pocket money and the piggy bank for money received as gift.
· Your guidance in using the pocket money helps the child to become a decisive, responsible money manager for life.
· The piggy bank can help them in saving enough money to buy their coveted toy or gadget.
· Let kids make mistakes for a better learning than giving structured advice.
· If your child is reckless, start with a small amount, and increase it if habits improve.
· If it doesn’t, wait for some more time to increase the pocket money.
10-12 years
· Open a good child-friendly bank account which allows the child to operate it independently.
· The experience of depositing or withdrawing money, signing cheques, getting a personalized statement and using a debit card will educate the child about all aspects of banking.
· It will also expose the child to banking concepts which most adults flounder at.
· Use online portals such as kidzzbank.com to introduce the child to banking concepts.
· Lay out minor errands for your kids and pay for their efforts to teach them money’s value.
· Encourage them to set medium-term buying goals from their monthly allowance and savings.
· Also, tackle their tendency to lend money to friends by teaching the importance of getting the money back.
13-15 years
· Have a two-pronged strategy as the child’s monetary needs may become bloated and endless.
· The biggest worry is not wasteful expense, but a carefree attitude towards money or a wrong habit of spending on vices.
· Increase their allowance, but also ask them to compare their income with their expenses.
· This will enable kids to learn budgeting and how to match their needs and means.
· Goal-based savings inculcate a sense of achievement in children.
· Don’t breach your own rule by replenishing their expenses without any accountability.
· One needs to strike a balance between parental indulgence and financial discipline.
16-18 years
· Although your child is on the brink of adulthood and preoccupied with studies, don’t forget to reinforce old concepts and initiate new ones at this stage.
· Discuss about taking an education loan if you can’t bear the school’s financial burden.
· Repayment of a loan inculcates financial discipline and also familiarizes the child with the bank-related transactions.
· It is also time to talk about taxes and investing, and how kids can grow their money by investing in suitable market-related instuments or in fixed deposits and gold.
· Stress the saving habit for long-term goals and discourage tampering with their bank savings.
· Also, urge them to supplement their savings by taking up part-time jobs during vacations or other free time, especially where they teach them to value labour and money, besides allowing interactions with customers, to help keep their egos in check.
· Include the child in family budgeting and other financial decisions, to make them understand the process of inflow and outflow of funds.
· Also, make them earn a credit card, instead of giving one, by explaining them why you did so.