Financial Literacy and Money Management for Children

As parents, aren’t we always focussed on inculcating good habits in our children? We think about good manners, good hygiene, 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. Give them the responsibility of a bank account: Set up a simple bank account for your child with the savings he has. This will lay the foundation for teaching them to invest. 

2. Get them saving for their education: If your teenager is already aiming for a particular university/career, teach her to start saving for it now. Include your kids in discussions related to their education savings. Tell them how you started investing early for their education and how compound interest has taken the small savings to a big amount. 

3. Teach them to be satisfied: Teenagers are at an impressionable age. They may tend to compare the privileges they have vs. what their peers have. While there is nothing wrong in spending a fortune on a birthday party, teach them that celebrations can be simple yet meaningful. Contentment lies in the heart. 

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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