Teaching kids to manage money – Life Skills

In school, I really hated maths. I could never understand why I needed to learn it, especially geometry and algebra! But, today I feel that maths is a useful subject to understand because in our life, there are a lot of things we need to add, subtract, multiply and divide. But most of all … count! Yes, money and of course, our blessings.

I never had any foundation of the value of money. My parents did not believe in pocket money, so I never knew what it meant to budget. In my later years, this was a painful discovery, especially when running a household.

So, here I advise parents, especially, to cultivate the habit of talking finances with your kids. Let them learn the do’s and don’ts of financial planning.

In India, parents feel it is their responsibility to take care of all the needs of children and we end up nurturing young adults who feel it their right to get things easily. They take a lot for granted. Then when faced with high salaries or even less than what they got from parents, they fly off the handle. Sometimes, it takes a good number of years and countless debts to come up to base.

Parents need to remember that they are raising future adults and money matters are serious if not handled well. You can really mess up.

So here are a few ways you can start your kids on the right path to financial management.

1. Teach them young – start as early as possible, preferably when they start doing math in school. Teach them the numbers by using change. Make it fun with games based on simple math.

2. Make them earn their allowance, like a salary. Give them small chores, suitable to their age and capability, to do around the house. Keeping their toys away, putting their clothes in the laundry basket, picking up their plates and putting them in the sink. All these would deserve a payment. This would give them reason to earn more.

3. Teach them how to spend wisely. Make a list of the basics you would provide. If they wanted something extra, then they had to pay the difference. This would help them understand the meaning between needs and wants. In the long run, this prevents extravagant spending.

4. For older children you could have them pay for their share of the utilities in the home. Give them the basic internet, phone or cable plan. If they use more, they pay more. Budget their expenditure on clothes, cosmetics and sundries. Anything over and above, comes out of their allowance. This helps them plan and save as well. Spending money on a whim does not always look appealing if you have to work for it!

One very important point to remember is that parents need to be strong and not give in to emotions. Children can be the best manipulators and negotiators. So beware!

If they do genuinely need an advance, make sure you deduct it from the next allowance.

Raises in allowances come with age. That is at the discretion of the parent.

Helping them learn the value of money also opens up savings and charity as part of the bigger picture. Let them be a part of discussions when making a new purchase or any heavy expenditure. Let them observe the process.

With these tips, in time you will find children being a lot more thrifty and making sensible decisions when it comes to money. It also inculcates a sense of independence in being able to achieve their wishes, on their terms.

" SPENDING & SAVING ARE THE SAME THINGS - JUST THINK "

-------- BIH@G