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  • 10 Financial tips from a father to his child

    Publish date: 15th June, 2018

    More than making our kids doctors and engineers (aren’t we obsessed with this!), it is vital to raise responsible, caring, and respectful citizens of the world. As parents, our duty should go beyond pushing our kids to score top marks. It’s our job to teach them certain life skills. And these values have to be inculcated at a very young age.

    If we want our kids to turn out to be financially responsible adults, we need to introduce the concept of money management as soon as they learn to count. Here are some tips on how you can encourage your kids to be financially mindful.

  • Age 3-5

    Discuss the concept of money: Three-year-olds may seem very young, but even at that age they are smart enough to grasp the concept of money. Tell them how money works. It could be as simple as: “Mommy works hard in the office to earn money. This money is then used to buy our food and pay bills.”

    Buy a piggy bank: Turn saving into a fun game. Show them coins of different denomination and explain their value. Give them spare change and ask them to put it in their piggy bank. Once a month, open the piggy bank, count the money within, and demonstrate how it has grown. They will understand how savings work and will take pride in their efforts.

  • Age 5-7

    Teach them to save up for toys: This is an exasperating age when demands start getting more insistent. And toys these days don’t come cheap. So, teach them to save money to meet their needs. Children often get quite a few monetary gifts from relatives. Encourage them to put the money in their piggy banks. You can even start giving them a small pocket money to save. They can buy the toy they want once they reach their goal amount.

    Talk about money values: Your family values regarding money need to be shared with your kids. Talk openly about the state of your finances. If there is a cash crunch, don’t be afraid to talk about it in front of your kids. If you’re saving up for a vacation or a car, tell them about your plans. It doesn’t have to be a heavy-duty discussion; a casual chat will do.

  • Age 7-13

    Take them shopping: Once the kids are older, take them shopping with you. It could be grocery shopping or buying home supplies. Show them price tags so they understand the value of things. Explain how you pay for those items. Talk about debit and credit cards. Teach them why one should spend only what one can reasonably afford, without relying too much on credit cards.

    Set saving goals: If your kid wants to go on a school trip or to the movies or just need a pair of trendy jeans, set a savings goal with them. For example, you could tell them to come up with half the required sum of money while you agree to fund the rest. This will push them to avoid wastage and save every penny.

  • Age 13-16

    Play money games: Monopoly is a great game to play as a family. It teaches strategies about buying, selling, investing, and rents. Players will learn to strategically think about money, while having fun!

    Open a bank account for them: This is a good age to open a bank account and teach kids about different types of accounts, and how interest is earned. Set them up with a small amount – you can be a joint account holder – and help them manage their money.

  • Age 16-18

    Encourage them to work part-time: They are now old enough to start earning. Ask them to take up a small job – it could be tutoring younger students, helping out at a family business, or volunteering at a nonprofit. Once they start putting their blood and sweat into it, they will begin to realise the value of money.

    Teach them about investing: Once they start making money, help them invest in a Systematic Investment Plan (SIP). Show them how putting aside a small amount each month can grow quickly, thanks to the power of compound interest. The money saved could help them take that coveted trip before college or even buy their first car. Click here to calculate how much your savings can grow over time.

What next?

Ultimately, the takeaway is to start early. Teaching these life hacks to your kids will put them on the path to financial success. Until then, you can invest on their behalf.
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