Buying your favourite candies with the extra money you had, after getting the notebook or pen that you needed. I know, we all would have been there. Well, this common ‘buying behaviour’ in kids clearly draws a salient line between the expenditure for requirements and optional goods.
Enlightening children about money management is crucial yet many parents encounter it to be a demanding task.
Financial skills play an indispensable part in an individual’s life to channel their decisions. It is surprising that our schools haven’t taken up the concern to educate children chiefly about finance.
Studies show that kids develop money habits by the age of 7. Kids at this age have the capability to understand the process behind how money is handled by adults. Parents can embark on this by cultivating saving habits at a small scale. An iPod bought by the child himself/herself by putting together the savings over a long course is valued more by the kid when compared to the same being gifted on his/her birthday.
The point I would like to emphasize is though the price of the product being the same, the former involves efforts and patience of the child which stands utmost. Little minds should be taught the difference between what is necessary and what is not. If you are at a store to buy a gift or for a quick grocery shopping, make it clear to them that you will only stick on buying what you want. Kids need to learn that going into a store does not always mean you will buy something which was not planned at the first place.
Money is finite and it is essential to think wisely before we spend it. If parents are comfortable enough, you can have a little talk on how the family earns their monthly income and the various expenditures to be met periodically.
Later on, when your kids obtain a monthly allowance or pocket money, they should be confident on their small financial decisions too. As they start spending for their needs or start their own savings, children must be aware of the role of finance for a long term goal.
Be it their education, medical expenses, basic needs, take steps to talk to your little ones about the system of the incoming and outgoing of money.
Once they are well equipped on the idea of savings, parents can introduce the concept of investments and how they can earn interests from savings. It is also a good time to teach them on how to keep track of their cash and to manage a mini budget for themselves. The confidence the kid acquires on independently thinking over financial priorities is great and encouraging it right from square one will help them a lot. Teaching children the basics of credit, finance and money management develops a sense of responsibility and problem solving at a young age. Money takes practice, just like any other skillset. As the world has begun to embrace developments in a cashless economy, it is highly relevant that we impart the knowledge of how money is earned, spent and allocated.
We at www.igenpod.com make sure that kids are learning these concepts in our classes and continuously improve their skills. We make sure that their future is secure. Invest in their future now by making sure they know what is best for them.
