When you turn to teaching your children money – you keep wondering what all to cover. Here lets make a start….

1. Accounting – absolutely basics. Give your children unlimited money, Rs. 100 per day or Rs. 10,000 per month – I am indifferent. Get them to write down every rupee – on what it is spent. Do not be judgmental – eating out, auto/taxi, whatever. This is the first step in learning about money. Dull, boring, but very useful.
2. Value – every toy has a price, but only the ones which are used have value. Simple first step in Value Investing. Take them to Crawford Market (Mumbai) – an amazing place to see value at play. Kids learn that a thing costing Rs. 1500 is available in a big show room for Rs. 6000 (not exaggerating, personal experience). Suddenly your kids know that there is value. There is value in eating in Kayanis (Metro Cinema?) than in a bigger branded air-conditioned (phew). Value investing is value buying.
3. Most of our kids have the silver spoon. Our challenge is to make sure that they do not need it! Not easy, but we must all find our own way of doing this.
4. Save Money: teaching them to live on less than what they have. Whatever they are given should still be enough for them to save say 10%. So if you give them Rs. 10K per month as pocket money push them to do a Rs. 1000 sip. Remember this is your kids money, let her decide where, what, why – DO TEACH THE PROCESS, not the product. If you drop dead she should know why you chose the product. If she chose it herself, she is well prepared.
5. Preparing your 15 year old for your death is also very important. Tell the story of all your investments. Investment Philosophy – as Kalpen of DSP would say. Why, how, what rate to expect, what to do if there is no return for 3 years, how to redeem, …the story of the investment is something your kid should write – YOU TO DICTATE. Awesome teaching this. I am yet to start, but planning to do it soon. Phew.
6. Meditation – staying calm when she loses Rs. 50 (fell down in a gutter when she was making a payment) or Rs. 500 (got cheated by a friend who had taken a loan and did not repay), – your kid should be upset (of course) but understand the perspective in the total money that she has (or you have!).
7. Not criticising her money decision – a Rs. 4000 shoe, or a 4k dress for a wedding where the bride wears a dress cost her Rs. 5k!, or whatever – she will learn. 4k is too small a price to give a lecture on “in our young age…….” kinda shit. Dammit, we all made our mistakes, stop acting like God.
8. Read, hear, watch – learning happens outside the school / college.
9. Compounding stories – sadly our education system does not teach the POWER of compounding. They teach only the formula. What you need to do is to teach the power of execution. Huge, huge difference.
10. Power of patience – buy a slab of chocolate – and ask him to eat one small piece a day. A typical big slab has 8×4 = 32 pieces. Ask him to eat this chocolate over one month. Remember he HAS TO EAT one piece a day. Not just forget it and eat all at the end of 31 days – that is easy. Eating one piece a day is tough. It is also imp that he does not get any other chocolates during this experiment.
11. Involve them in the charity that you do. I do not do too much of charity, but it is concentrated to 3/4 organisations. Mostly concentrating on educating children. Tribal school, Teaching English initiative,…I do not spread myself thin.
12. Resilience – the ability to handle losses. One day when you are not around, they will know how to handle you not being there. Prepare them for not having you around!