- 18 OCT 2018
6 Money Management Basics Your Smart Kids Need to Know
Are your Kids smart? The answer is no brainer. The present generation Kids are smart. To make them smarter parents send them a various hobby and academic classes. We are living in the world of super kids.
But there are skills which they do not learn in school or classes. They learn it themselves. If parents influence their self-learning, they can learn quicker.
"Formal education will make you a living; self-education will make you a fortune."- Jim Rohn
There are skills like emotional intelligence, social etiquette, fitness - diet and exercise, and money management skills to name a few.
They should know about six basics of money management; earning, saving, investing, spending, credit, and giving.
Here we present money management basics which your kids need to know
You need to earn to fulfil your needs. You also need to earn to fulfil the needs of people dependent on you.
They see their parents working for money. Their parents are fulfilling their demands with the money. They also should realise the importance of earning to live a good life.
Give them an opportunity to earn for themselves early in life. They can sell old papers, home garbage, offer themselves for volunteering, teaching other students. Give them money earring projects. This will make them generate an idea to earn money.
“Children must be taught how to think, not what to think.” Margaret Mead
There are stories of many rich and famous that used to sell newspapers or do the odd jobs when they were a child. This is the reason perhaps they understood the importance of money early in life.
If you fulfil all the needs of your kids, they will never realise the importance of frugality and smart spending.
You should accompany your kids with you while you go to the market. They will learn the importance of bargaining, buying only what you need and when you need.
These small lessons will go a long way to make them money savvy.
"A penny saved is a penny earned." Benjamin Franklin
Indian economy is survived on savings while western economies went burst on splurging.
Knowing the importance of saving is the key lesson in money management. Give them the incentive to save from their pocket money. Make them realise the importance of saving by creating future uncertainties.
You kids should know money saved should be able to earn as well. Who pays for the money invested? Why do they pay to use other’s money?
Make them understand how the banking system works. What savers get by investing and what borrowers pay for borrowing.
Expose them to banking.
"If you would know the value of money, go and try to borrow some." Benjamin Franklin
You can borrow from others but it has a cost. It is also a social taboo. Therefore borrow if you must.
This will reinforce the importance of saving and investments.
There is a game called Business. This game is the perfect way to teach your kids about money and business. Play it with your kids.
Giving is a part of earning. Helping the needy with the money is perhaps the best use of your money.
The money you earn is not for yourself. You need to take care of others in your social circle and society who are needy.
“Children are sponges—they are going to absorb whatever is around them, so we need to be intentional about what surrounds them.” Dave Ramsey.
These are six basic but fundamental lessons about the money you kids should learn from you.
You may also like to read: The dangers of remaining financially illiterate for young educated Indians
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