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When is the Right Time to Teach Your Kids About Money Matters?

“Don't just protect your child from the future; prepare them for it".       -                 Robert Kiyosaki

Robert Kiyosaki, the author of the bestseller “Rich Kid, Smart Kid", talks about how financial lessons that he learnt in his early days helped him become a millionaire. It's never too early in the life of a child to start talking about money; in fact, the sooner the better. So, if you haven’t yet initiated such conversations, it's the right time.  You must give your children the financial head start by inculcating the habit of financial management when they are young.

From your child's first piggy bank to their first credit card, here’s how you can teach your kids some valuable financial lessons:  

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Stage 1: Early School Students

Get a Piggy Bank – Start with giving your child a piggy bank when he enters in elementary school. Personalized piggy bank with their favourite cartoon characters is the best way to encourage kids to take pride in saving money.

Find Fun Ways to Teach–One way to do this is to play the coin identification game. You and your child can trace the outside of various coins and then color them. Then ask your child to match the coin to the image while talking amore about that coin. Apart from this, there are many online games that you can play with your kid while subtly teaching them about money matters. The idea is to introduce them to money.

Stage 2: Middle School Students

Assign a Weekly Allowance –An allowance is a great teaching tool. Fix an amount for your child’s pocket money and don’t give extra pocket money if he spends it mid-week. This technique will allow your child to learn the discipline of money management.   

Teach the Value of Money With Delayed Gratification Technique – Don’t comply with your child’s whim every time; make him understand the value of the money. For example, if he wants a skateboard, ask him to save a bit of his pocket money or earn the amount by doing simple house tasks. Give him a doable target and appreciate him if he achieves it by handing over a bonus

Stage 3: High School Student

Involve your Child in Family Budget Planning – Involve your child in family budget discussions. Let him know how much you earn and what are the family responsibilities. This exercise itself will set the wheel in motion.

Send Your Child For Purchasing Household Stuff – Give your child the shopping list and ask him to shop. This will teach him subtle art of negotiation and understanding the economics of market.

Open a Bank Account – Get your child to open his first bank account and teach him about financial concepts such as savings, commissions and interest. A visit to a real branch to deposit money creates a memorable and rewarding life experience for your children. I still remember the pride I felt holding my first bank account book. All of a sudden, I felt responsible!

“One of the greatest gifts you can give your kids is to prepare them to be responsible, empowered adults around money.”   -Unknown

Written By: PolicyBazaar - Updated: 17 August 2020
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