What children should know about money?
Many people deal with kids in a way that they think they do not understand money…This is very funny and sad. Let us run a checklist on what your kids are learning:
– Do your kids realize that everything costs money? The domestic servant, the driver, electricity, using a house (rent), banking, investing – NOTHING COMES FREE! Teach them that if you use somebody’s time, services, goods, they have a claim on your money. It is paid immediately in some cases and paid at the end / beginning of a particular period.
– Do you allow them to pick up anything or everything in a shop? Or do they have to ask you what they are allowed to buy before they can pocket something? This again is from the first point – do they know that all this costs money, and money is not easy to come by.
-Do they know that the ATM is not kind of a magic box which spews money whenever you need it?
-Do they know that you go off every morning to work your butt out to fill up the ATM so that it has money to give you whenever you need it?
Do they see cash at all…or do they only see you swiping and signing? Handling cash surely helps in learning about cash management. Frankly asking a 8 year old to go to a small shop to buy bread, butter, cheese, etc. is a great way to learn mathematics, remembering, etc. I have run errands as a 8 year old and have made my daughter run these errands when she was 8.
Does your kid have a piggy bank? It works! When my daughter wants something, I tell her how much it costs. Sometimes when I know she is just testing the waters, I say you have to buy it from ‘your’ piggy bank. Frankly I think it makes her think twice. And the ‘pocket money’ is not even earned money!
A piggy bank also helps in learning the importance of saving money. The money in the piggy bank goes into her savings bank account – and she insists it go into a FIXED DEPOSIT. I have had a sensible dialogue with 8-10 year old kids about savings a/c, saving, fixed deposits, insurance, equities, mutual funds – and I think they learnt well!
Do you yourself delay some gratification or you are the ‘Can afford it, Must have it’ types. Teaching delayed gratification is a very important lesson for your kids. Later on in life if you want to see them behave responsibly towards money it will be absolutely necessary to teach them this aspect of life.
anitha
I think teaching children about money must be a part of family’s financial planning In that context this is a great post.
pravin
how about schools too introducing this. i mean if they can teach igneous rocks and basalt rocks,why not 1 period of basic life finance
Atul
Hi Pravin,
Schools are money making business. There is nothing called value education. Only parents can teach the children.
Regards
Atul
Venkat
Hi,
Nice one.. very important for the kids of the present generation where they hardly value money. With shrinking family size, kids become even more adamant for things they want and parent also relent more often than not.
pravin
atul,
i would be extremely suspicious of businesses that dont make money.”values” are always instilled from your interactions with people as you grow.i’d expect nothing more from schools. i’d find it profitable to teach young children basic finance.schools should do it as a profitable activity and not charity.
Victor
Educating children on issues relatin to money is very imperative both in school and at home.