Be it any time of the year, we as parents are always busy thinking of ways to keep our kids entertained, active and most importantly out of trouble. Many parents encourage kids to take up hobbies or co-curricular activities to make productive use of their free time. Another activity that can be introduced to kids is money lessons. It is important for kids to understand not just the cost of things but more importantly their value.
Financial education is something that should be started as early as possible. And it should not be left to a one-off discussion but rather should be made a part of their daily lives. Here are some easy and fun tips to teach the importance of money to your kids:
Start with a piggy bank
This is one of the easiest ways to start off. Gift your kid a piggy bank and encourage them to save the money they get as gifts in that. You can get them excited about the savings by setting small targets such as they can buy their favorite toy once they have saved enough money in the piggy bank.
Tip: Let your kid pick the piggy bank they want. This will get them more involved in the entire process.
Involve them in daily purchases
Once your child is familiar with basics (addition, subtraction, etc.), make them pay the bill during activities such as grocery shopping, dinner outings and travel fares. This will help them count money and take the balance money back. Also, while picking out your grocery items, ask their views while selecting any item. For instance, pick two packets of biscuits and tell them the price of both. Ask them if you should pick the expensive one or the other. This will develop their ability to compare between options, from a price perspective.
As parents, we want to ensure that we give our kids all that they desire. However, we must teach them the importance of waiting and making a choice. If their list for you has 3 items, ask them to prioritize. Tell them that you have a fixed budget and can give only 1 toy this month. They need to wait for some more time to get the remaining things. Teach them how you too incorporate budgeting in your day-to-day lives.
Open a Bank Account
We all love the benefits of digital banking. But occasionally, make a visit to the bank along with your kid. Teach them about the basics of banking – what does a bank do, how does the money grow, etc. Most importantly, tell them in a way that is fun and relatable for them. Open a Bank Account for your child and introduce them to concepts such as savings, passbook, statement, withdrawals, etc.
Once the kid is grown up enough, give them a small amount of money every week. Let them decide how to spend that money. Slowly and steadily, you can encourage them to save a portion of their pocket money to make bigger (and more expensive) purchases. This is also a good time to teach the concept of charity or helping the under privileged. However, do not be very generous with the pocket money amount. The idea is to only teach them the concept of saving first and then spending.
Last but not the least; children learn more from what we do than what we teach. Hence it is important that we also inculcate the same fundamentals in our own lives. As they say, practice before you preach.
Mutual Fund investments are subject to market risks, read all scheme related documents carefully.