Not just education, teach kids money management; Follow “these” 7 simple tips – News18 Lokmat News WAALI

Bombay, September 26: Every parent constantly strives to keep their children on their feet by giving them a good upbringing. Giving financial education to children while providing school and college education has also become very important these days. If saving and financial planning are taught at an early age, no problems will bother them in the future and they can become self-sufficient.

Most parents keep a certain amount of fixed deposit in their name with their children’s future in mind while meeting day-to-day expenses as inflation rises. But giving financial planning lessons to children is neglected, thinking that they will automatically acquire financial knowledge when they grow up. Unless children are told the importance of financial literacy, children will not take the initiative to learn it. Children need to be told how to plan their money. Financial literacy has become an integral part of life in today’s world. Teenagers are always eager to live a better lifestyle based on their own income. Using wisdom to spend money on the essentials not only means financial literacy, but the habit of saving and investing is equally important.

Many schools are now innovating to teach students financial planning courses alongside basic education. Financial literacy has been included in the schools curriculum to learn how finance and economics really work. Although this activity takes place in schools, it has become necessary for us as parents to teach our children the importance of money and where to spend money wisely. There are many important tips for parents to teach their children about financial education. Among them, selected aspects can be considered as follows.

Children should be involved in financial planning-

If we are going to bring an expensive item into the family or when we go to the market to buy groceries, we should ask the children’s opinion. It will help children to be conscious while making financial decisions and develop the attitude of thinking ahead and spending on them.

Give the kids a piggy bank-

Give the children two piggy banks to deposit and spend money on. Parents should advise the child to keep depositing money in one and spending the money in the other piggy bank as needed. By doing this, children will have savings and try to buy only what they need while spending.

Explain the difference between need and want

If parents are able to understand the difference between what is needed and what is wanted, children will certainly be able to make sound financial decisions. When living in a family, parents think of luxuries like clothes, jewelry, toys, tourism after spending on essentials like food, shelter, and medicine. We can teach children that after having met the necessary needs, the rest must be taken care of.

Explain the reconciliation of income and expenses-

While giving financial planning lessons to children, every little thing should be mentioned. Involve the children in the list of monthly expenses. It is through this that children can acquire basic knowledge about bank accounts. They can also receive information about their income and expenses. We can also tell the children that the amount that will be saved, excluding income and expenses, should be saved. This process can help children make the right decisions for the future.

Ask to spend money in the right place

Most children do not know the financial situation of their parents, so they demand unnecessary things. In this case, as parents, it is necessary to firmly tell the children that we can only buy one item at a time. For example, when we go to the store to buy groceries, if there are two items that the children like, we must tell them to choose one of them. After asking the children to choose one thing by telling them the cost limits, the children will develop the skill of choosing which item is important first. This can be beneficial for children when making financial decisions in the future.

We should learn exactly how money grows

Often we tell children how to save money. But we rarely talk about how to make savings grow. Children should open a savings account at the bank from an early age. Advise them to deposit a small amount each month into this account. How does the bank pay interest on deposits in savings accounts? This question should also be explained to children so that children can get information about how money grows on its own. Teenagers should be aware of fixed deposits. If college-going students are knowledgeable about the stock market and mutual funds, they can gain more financial knowledge. Much depends on children’s interest and learning ability. But thanks to financial literacy, students who are interested in this field can be considered for a career by giving admission to this course.

Children should learn the real business

Children should be taught the habit of saving money received from the family. They should be advised to create two piggy banks for this. The money received from the family should be deposited equally in both piggy banks. Ask the child to take money from the spendthrift piggy bank if he wants to buy something of his choice and advise him to take money from the other piggy bank if he wants to spend it wherever is necessary. From there, kids can find out how much money they need to deposit for any item.

It is generally believed that only adults should have financial knowledge. It is important that children acquire financial knowledge like adults. Said Garima Kaushal, director of X Capital. He also says that after educating children about finances, it can be beneficial to strengthen their financial base in the future.

Max Life founding agent JK Mehta says that while school children are taught arithmetic and compound interest, important aspects of saving and investing should also be taught. Government education boards and regulators have adopted a national policy. But this benefit has yet to be realized in financial education. There is still a lot to do.

Co-founder of Gullak Theory, K. Prahlad expressed the thoughts above. They can be very beneficial for the bright future of children.

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Geraldine L. Melton