Incentivize for saving: Making kids understand the difference between needs and wants is important. This can be done by incentivizing them for saving, and not spending unnecessarily on things which are not important. Of course, as a parent one must know where to draw the line, as being too strict and controlling the child’s desire needlessly can invite untoward consequences. Nevertheless, help them prioritize their goals by sitting with them and explaining the rationale behind the decision. This will teach the kid to take prudent financial decisions later on in life.
Use financial games: There are many money based games which are available, which can be used to teach concepts to children. Adopt a mix of board games and online games. Some good games you can use are Cashflow by Robert Kiyosaki, Pay Day and Chanakya's Chakkravyuh. Don’t just view this as a game; rather explain to the kid the underlying principle behind taking a financial decision in the game.
Take them to the bank: When you take your kid along with you to the bank, the kid sees how things function in the real world. Explain concepts in a simplified manner. For example, you may be doing a basic transaction such as withdrawing money. Make your kid understand that you are taking out money which is in your account, and that you will not be able to do this, unless money has been saved in the account. Thus, teach your kid the importance of savings.
Ask them to fill up forms: If your kid is older, you can teach him to fill in your account opening form or SIP forms. This may seem a bit overwhelming in the beginning; but teaching your child properly to fill in various fields can help him do this correctly.
Buy money related children books: Comics, magazines and story books which talk about money in simple terms is another way of introducing your kids to money. Getting them to read about fables is a great way of making them understand easy concepts in a straightforward manner. You could introduce your child to ‘The Art and Science of Teaching Children about Money’ written by Amar Pandit. RBI, as a part of the financial education programme, introduces basic banking features through its online book available here.
Watch children movies which talk about money: Although it may not be easy to find movies for children that talk about money, this can help in driving the point home in a better manner. You can start off by getting them to watch “One Idiot” movie, which shows the importance of savings to kids. Here is the YouTube link of the movie. You can also download short stories or fables which talk about money, from the internet and watch it with your kids.
Get them a piggy bank: A piggy bank is an effective way to make your kids understand basic concepts about money. Teach them that the money they save is what will be available to be taken out. Explain that when one saves money in the piggy bank regularly, it grows to become a large sum after a period of time.
People usually understand the importance of money and other finance related matters when they start working. However, today, with opportunities being wide and varied, it is imperative that knowledge about money matters should start at an early age. The Government has begun to stress on financial literacy. Nevertheless, as individuals, we can take the first step towards this direction by educating our kids on these topics and making them more financially responsible. Involving children in financial matters of the family, however small or big it might be, not only gives them a sense of participation, but also helps in teaching them about money. Start small, keep it simple and make it interesting for your child to learn about money matters.
This was originally published on Moneycontrol.
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