Finances for Children: Teaching Children About the Money

“The world is changing at its fastest pace. Modernization and Globalisation has brought the world into one big family today,” says Dr. Jyotsana, Principal of Queen Global International school.

As parents, aren’t we always focused on keeping our children at pace with changing times while also inculcating good habits in our children? We think about good manners, good hygiene, and a good routine. We understand that a good habit will hold with the child for a lifetime. 

Well, not many parents think about developing good habits with respect to finances. Learning to spend wisely and saving for the future is a habit that can take time to build, even with adults. Here are some tips on how to develop good money habits in your child in an age-appropriate manner. 

1.  Use a piggy bank or clear jar: Starting your kid on a piggy bank is a great idea to begin teaching them about money matters. Even better, use a clear jar or bottle where they can see the money growing. Yesterday, there were two five rupee notes, today there are three! Each time they add to their savings, talk about it and make it a big deal. 

2.   Allow them to make simple transactions: Simply lecturing a child about how costly his toy is, is not likely to go down too well with him. However, they need to understand that things cost money. Allow them to spend from their piggy bank to buy the toy they want. They will understand the need to budget their expenses. Next time you go to McDonald’s for breakfast, encourage them to stand in the line, pay for the order and help them check whether the billing was done right. 

3.  Be an example: If your children see you spending mindlessly at the mall, that’s what they think is okay to do. Or if they watch you shop for things online, that are just lying around without being used. If they watch you assess each and every spend from a wants vs. needs perspective, they will learn to do it later. Set a healthy example for your kids. 

Teaching children about finances will be a time-consuming task. But it can go a long way in helping them manage their money better when they are adults.

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