All the great people who understand the importance of teaching kids about financial responsibility, are the ones who are doing great in stock markets. They say that Saving is an important lesson they learnt at an early age. And always focus on teaching the same to the fore coming generations.
The legendary “Warren Buffets’ ‘ say that the kids should be taught about managing money even when they are in preschool. He focuses on two vital things, first, time is a major factor and secondly, 80% of a child’s brain grows by the age of 3. And by age 7, basic concepts relating to future financial behaviors should be developed. According to the reports, 29% of parent’s start educating their kids about finances post the age of 15, while 15% said they never did.
In today’s fintech era, the ineptitude to make financial decisions which can be because of confusion or fear of taking wrong decisions is considered to be financial paralysis. While the menace can leap from a diversity of reason, the impact of parental financial behavior plays a big role. Fights over finances can make the child grudge money and avoid all financial decisions as an adult.
The parents should encourage their kids not to give up just because something doesn’t work the first time. The aptitude to think creatively and out of the box will be fruitful in future if they run into financial challenges. One should engage in the activities which help them turn to be a flexible thinker.
A big quote says, “A penny saved is a penny earned.” Help kids to learn to save and manage their earned money (either earned as a gift from relatives or by helping in household chores). It’s highly important for the generation to understand the difference between wants and needs. Discuss with them about how they wish to slash the money between savings and spending. Discuss and find out if the spending is wants or needs for them.
We’ve all been guilty of paying more money for a cool brand when we could grab a similar for a lesser price. The idea behind this is to help kids understand how the brands lure us to buy their products, as well as how to distinguish what is and what isn’t worth paying for.
The key towards smart decisions is to think about how different choices can impact future outcomes. Enroll them in household decisions, understand the reason behind the decision they made in such circumstances. Teach kids the habit of making wise decisions to save money for the things they want to buy.
It’s never too early. Instilling healthy financial habits in kids is one of the most important things one can do to ensure they have a successful future. Whether it’s imparting kids the value of a rupee, the difference between needs and wants or the value of saving. Such encounters at an early age, brings the wealthy future.
