With increasing healthcare expenses and nuclear families becoming a fashion, Kids must learn good money management skills.
Many fresh surveys have revealed that Indians living in major cities are not too good when it comes to monetary planning. We can somewhat blame this to our social framework, which does not allow us sufficient opportunity to sharpen our money management skills during childhood. Though, as adults, we would do a great disfavour to our kids, if we fail to infuse good financial habits in them.
With increasing healthcare expenses and nuclear families becoming a fashion, children can no longer stay unaware in monetary matters when they grow up. Below are five proven steps to train kids about good cash management.
First and foremost- Be an excellent role model
Studies have shown that kids frequently pursue grown-ups in the family – mostly parents – as their first role models. You may be amazed to know that simulation plays a significant part for kids to be taught. Engaging children in domestic monetary decisions is a good way of doing this.
You can talk about, describe and take kids viewpoint on daily issues. Here are some examples to engage your kids on such issues-
-Shopping: Why according to them purchasing garments on sale is a better choice?
-Dining: Enjoy the same delicious food in a less expensive restaurant or at home, a better option?
-Utilities: Will trimming down AC usage help in curtailing electricity bills?
-Grocery: Why purchasing country made products instead of imported one be cost efficient?
-Prudence: How, by spending intelligently, one can bank for birthday gifts for friends and family.
Motivating, admiring and rewarding children when they display good money management performance is the best way to go about it.
Utilise video games
In the age of Xbox and Playstation, there is no better entertaining way to teach kids about monetary skills. Introduce your children to play trending online cash management games like Road Trip to Savings, Financial Football, Peter Pig’s Money counter, Money Metropolis, Financial Soccer, Record shop tycoon, Burger Restaurant, and many more.
The good old family game like Business and Monopoly are still believed to be one of the best ways to teach precious financial lessons. This way, kids not just learn to count but also help them in leaning out basic calculations. These games help them learn how to deal best with limited cash and think the way a banker does.
Persuade saving towards targets
Converse with kids about the things they want to purchase in near future – toys, games, bicycle and so on. This will assist them to manage how much they require saving each day to achieve their goal. Gift them a piggy bank to keep safe their savings. Children can also be mentored about the significance of prioritising and trading off, as not all targets are reachable with the same capital. When repeated over a period of time, children start thinking of long-term savings and build up financial control, which is lacking among adults now-a-days.
Give them pocket money
Children need to know that money does not grow on trees but is made through hard work. Kids should be motivated to earn pocket money by getting engaged in various types of tasks. Like a kid of 7-12 age group can without doubt manage household chores while youngsters can earn a good and decent pocket money by doing a part-time job. By earning their own pocket money, children tend to become more responsible and start realising the worth of hard earned money.
Assign budget plans and allow making mistakes
Pass an overall budget idea to children and give them money to come up with a plan to accomplish the same. Like, ask them to plan a picnic within a strict budget. Let them come up with all fun activities, food, fuel and other expenses and let them make payments for those costs. Failure or faults are also the best teachers. Let your kids make out that they have overspent on one activity at the cost of another or they plainly undervalued the expenses. They must to learn to make preferences within the given budget. Engage adolescents in managing and evaluating household budgets.
