Children are like soft clay that can be moulded into any shape and form and parents are the sculptors who have the responsibility of shaping these little angels into responsible and socially aware citizens.
In the process of giving children holistic education, bits from every aspect of adult life must be introduced so that when the child grows up, he/she is able to easily adapt to the everyday challenges of living. As such, even the basic concepts of financial planning and management must be introduced at the right age. This being a very tricky topic must be handled with great care so that children do not get confused or feel over-burdened.
So, if you too have been planning to acquaint your children with the money matters, here’s how to start:
- Avoid instant gratification and set short term goals: This simply involves the art of saying ‘not right now’ to your child. Parents love fulfilling the wishes of their children but this often comes in way of their sound development as they start assuming that everything can be instantly achieved. The best way to deal with this is putting the responsibility of buying the desired stuff on their shoulders. Just make sure that the goal is achievable. In this manner you can teach the child the skill of saving for future needs. You can start practicing with children in the age group of 4-5 years.
- Make Saving, sharing and spending a practical lesson: In order to explain a concept to a child you need to give him/her a hands on experience of the same. The same applies for training in the financial matters too. Designate three piggy banks, one for saving, one for spending and one for sharing and each time the child gets any money in the form of a gift or even for pocket money ask him/her to split the same into three parts and accordingly put them in the three designated piggy banks. This way the child learns the very basic concepts of need based allocation of resources as well as saving to share with the needy.
- Involve the child when carrying out monetary transactions: Whenever you are carrying out any monetary transaction in super markets or with vendors selling things like ice-cream and candy that is of interest to the child, always try to keep the child around to witness the proceeding. Be it in the process of bargaining to get the best price or paying the bill for a pizza let the child participate actively as that makes them feel responsible and capable too. As Grace Jackson Suntrust suggests, such practices will make financial dealings a very regular practice for children and not make them wary of such dealings.
Grace Jackson Suntrust, with a MBA in finance from the University of Pittsburghis one of the most potent advocates of educating children about financial dealings. Grace has herself been the Credit Advisory Service Executive Senior VP with the Sun Trust Bank and has seen the major ups and downs in the financial scenario of the country due to which she suggests that children be taught the right practices around money matters from a very early age.
Therefore, you too must start educating your children on such aspects so that they are well prepared for every situation in life.