The best gift to your children on this children’s day could be inspiring a quest to achieve financial interdependence by imparting the knowledge of savings and investments. Kids pick habits of their parents, be it their shopping custom or any financial activity they do. Teaching the children the art of saving is one of the first steps you can take to help them on their journey of financial independence, however long it may be.
At EarlySalary, we’re not just about loans and credit. We’re passionate about a financially strong, resilient society. It’s why we offer instant education loans to enable parents in making the most prudent investment for their children – in their learning. It’s also why we couldn’t help ourselves in sharing some ways through which the habit of saving can be inculcated in your children. Here they are:
- Fixed pocket money: With great money comes greater responsibility. Instructing children not to spend everything as soon as they receive money, whether verbally or by action, is one of the easiest steps to take. An incentive can also be given, not necessarily money, for their good deeds like helping with house chores, being at their best behavior, or completing their assigned work.
- Teach them to be accountable: Ask them to keep a note of all their ‘expenses’ and their ‘income,’ from buying a notebook to receiving money as a token of love from relatives. The money is supposed to be kept in a safe place, which should be taken care of. They should learn to be accountable for expenses without taking it as a burden.
- Opening a bank account: Opening a bank account should be top on the list after your child turns 18, or if you can open one during their childhood, the better. Teach the benefits of keeping the money in the bank; describe its safe nature, the possibility of earning interest, etc. Encourage them to deposit their money in a savings account, which could be their piggy bank, with all their pocket money or any kind of gift money received from relatives.
- Financial awareness: During weekends and holidays, parents can sit with their children and describe some of the financial world’s nuances in simple terms. Talk about this as if they were stories or tales. Teach them about the basics of savings and investments and give good illustrations to support your ‘tale.’ This will ensure that the kids grow up to be more financially aware. As they grow older, discuss some financial decisions like taking a new gadget, car, or planning a vacation. Allow them to put in their suggestions.
- Setting goals: As they grow older, seed in your children the thought about their future wants and needs, and they should be encouraged to work for it. For example, your child wishes to have an RC-helicopter worth Rs.1,000, encourage them to save for their desire, and of course, add something from your side so that they can achieve their desire.
- Teach about comparison: A toy might cost a certain amount at one place, while it may cost lesser elsewhere. Let the kids prepare a list and compare the prices of those items over different places. The advantages are obvious – this will teach them to get the most out of the money, and any kind of hefty pricing wouldn’t dupe them. Share your experiences and show how you shop by comparing across different platforms.
- The importance of giving: Earning and spending are aspects of life that come into one’s behavior without teaching. But helping the less fortunate should also be among the top lessons to be seeded in your children. This will teach them to be grateful for their upbringing and develop a sense of empathy in them. Find ways for them to help others. If they are fond of animals, take them to animal-shelters or if they are environment-conscious, ask them to donate something for that cause.
Money management is one of the most valuable skills you can give your children. The best way to do that is by demonstrating it yourself. And perhaps the best time is Children’s Day. As they say, when the foundation is strong, the whole structure will stand on its own. For more financial insights, head to the EarlySalary blog.
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