Wondering how to raise money smart kids? As parents, almost all of us understand the criticality of rendering our children early on with money management skills. Gone are the days when one person in the family or only the husband was responsible for balance sheeting the entire unit. Now is the age of autonomy and each and every being is doing his/her own budgeting and planning.
If you can impart sound financial footing with a basic understanding of how the currency works, why saving and planning for contingency is important, how to budget and schedule your cash etc., then you have successfully prepared your little ones for the financial challenges they have to face in adulthood and with good money habits. Do not wait for your child to start understanding complex economics or maths, always start at a young age.
Talk about money: In this era of digitalization and invisible plastic money, a child may sometimes feel that money never ends! Talk to your child about money, about the value associated with things and about real world situations where money is spent. If your child is say four or five years plus, you can make him pay the housekeeper or the grocery store in your presence, handing over the exact cash, so that he/she at least gets the idea that there is something which you give in exchange of some service or product. Nothing comes free!
Pocket-money: The age old concept of pocket money is still valuable. This is how children learn to plan, they learn that it is not possible to buy everything and they must prioritize their needs. They learn the basic mathematics practically, and most importantly, they learn that money can buy them physical comforts, so they must strive to be financially successful in life. Another aspect to this is that, which is rather important, pocket-money teaches children that money can only buy material things or services, so they also learn about the importance and value of family and relatives in life.
Comparing: When you go to a supermarket or something, try to make your kid compare between two say, chocolate prices, or some stationary item prices, so that they also know that each and everything is available in a general bracket of prices with varying quality. This will also help promoting decision making skills among young children.
I recently met a friend who told me that her six year daughter never disturbs her when she is working on her computer. The child knows that mommy is working hard to earn money so that she can buy candies! It’s never too late to start something with children, so better start imparting these survival skills early in life.
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