Don't leave them in debt: 5 crucial things to teach your kids about money management skills
Instead of preparing kids to do a 9 to 5 job, parents should encourage them to develop entrepreneurial skills. This instils a sense of initiative in young adults.
- May 1, 2024,
- Updated May 1, 2024 9:12 AM IST
The financial world is indeed complex. However, as parents, you have the power to equip your children and young adults with the necessary money management skills. This is not just about helping them achieve financial independence but also about instilling in them a sense of financial responsibility when it comes to their daily needs.
This story will introduce you to some exciting strategies and resources for imparting financial wisdom to your kids.
Share your savings experience: The best way to teach your kid about saving money is by sharing your hands-on experience. "Every parent should Set up a ‘Savings Challenge’ to transform dull money matters into an engaging learning opportunity. Whether it's saving for a desired gadget, a future vacation, or even for charity, such challenges can teach the importance of budgeting, goal-setting, and delayed gratification. For young adults living independently, real-life scenarios like budgeting for groceries or planning a family or friend outing within a set budget provide practical lessons in financial decision-making," says Krishan Mishra, CEO of FPSB India.
Routine discussion: One must discuss financial matters with family on a routine basis. "Regular family financial meetings offer a platform to openly discuss budgeting, savings goals, and financial priorities. Such meetings clarify money matters while planning one's finances," said Mishra. Kids must participate in discussions, share their opinions, understand the value of money, and learn from real-life examples shared by grandparents, parents or guardians.
Create a money diary: One must try to create a 'Money Diary'. This can be a powerful tool for enhancing financial awareness. Parents should encourage children to regularly write their expenses, income, and savings goals in their diaries. By maintaining such records of their financial transactions, they will develop money management habits and identify areas for improvement.
Positive financial behaviour: Parents should teach kids about the downfalls, too. They should teach them how to regain their financial status whenever they are overburdened with debt. In any financial situation or condition, teach them to remain calm and look forward towards their financial goal. "Celebrations need not be extravagant; a simple acknowledgement, praise, or a small treat can go a long way in reinforcing good financial habits in youngsters," says Mishra.
Encourage entrepreneurship: Instead of preparing kids to do a 9 to 5 job, parents should encourage them to develop entrepreneurial skills. This instils a sense of initiative in young adults. Mishra says, "Whether it's starting a small-scale lemonade stand at a community fair, or offering services like pet-sitting or baby-sitting, entrepreneurial ventures teach essential skills such as planning, budgeting, and savings. These experiences nurture an entrepreneurial spirit and impart invaluable lessons about resilience and financial rewards."
The financial world is indeed complex. However, as parents, you have the power to equip your children and young adults with the necessary money management skills. This is not just about helping them achieve financial independence but also about instilling in them a sense of financial responsibility when it comes to their daily needs.
This story will introduce you to some exciting strategies and resources for imparting financial wisdom to your kids.
Share your savings experience: The best way to teach your kid about saving money is by sharing your hands-on experience. "Every parent should Set up a ‘Savings Challenge’ to transform dull money matters into an engaging learning opportunity. Whether it's saving for a desired gadget, a future vacation, or even for charity, such challenges can teach the importance of budgeting, goal-setting, and delayed gratification. For young adults living independently, real-life scenarios like budgeting for groceries or planning a family or friend outing within a set budget provide practical lessons in financial decision-making," says Krishan Mishra, CEO of FPSB India.
Routine discussion: One must discuss financial matters with family on a routine basis. "Regular family financial meetings offer a platform to openly discuss budgeting, savings goals, and financial priorities. Such meetings clarify money matters while planning one's finances," said Mishra. Kids must participate in discussions, share their opinions, understand the value of money, and learn from real-life examples shared by grandparents, parents or guardians.
Create a money diary: One must try to create a 'Money Diary'. This can be a powerful tool for enhancing financial awareness. Parents should encourage children to regularly write their expenses, income, and savings goals in their diaries. By maintaining such records of their financial transactions, they will develop money management habits and identify areas for improvement.
Positive financial behaviour: Parents should teach kids about the downfalls, too. They should teach them how to regain their financial status whenever they are overburdened with debt. In any financial situation or condition, teach them to remain calm and look forward towards their financial goal. "Celebrations need not be extravagant; a simple acknowledgement, praise, or a small treat can go a long way in reinforcing good financial habits in youngsters," says Mishra.
Encourage entrepreneurship: Instead of preparing kids to do a 9 to 5 job, parents should encourage them to develop entrepreneurial skills. This instils a sense of initiative in young adults. Mishra says, "Whether it's starting a small-scale lemonade stand at a community fair, or offering services like pet-sitting or baby-sitting, entrepreneurial ventures teach essential skills such as planning, budgeting, and savings. These experiences nurture an entrepreneurial spirit and impart invaluable lessons about resilience and financial rewards."