Parents shouldn't shy away from discussing money and budgeting with their children. Children look up to their parents for guidance and advice. They seek to learn from their parent's experiences.
By Javed Tapia
Parenting is evolving in India. A couple of decades ago, it was uncommon for both parents to work, however, today it is the growing norm. With the ever increasing cost of living and altering mindset, family dynamics are changing drastically. While this surely ups the lifestyle quotient, it leaves working parents wondering how their children are spending money on their day to day expenses.
As parents, we do understand how important it is to teach our children how to manage money smartly. How essential it is to give them early lessons on spending wisely and saving. However, more often than not, we are clueless about how to do it. According to a new study by ING Direct, an astonishing 87 per cent of teenagers admit that they do not know much about personal finance.
If we look at the bright side, most children want to learn about money management. The study further states that children want to learn smart money management, but lack the tools they need.
Parents can inculcate good money habits in their children by following these simple steps:
Have a conversation about money with your children
Parents shouldn’t shy away from discussing money and budgeting with their children. Children look up to their parents for guidance and advice. They seek to learn from their parent’s experiences. So, if you openly discuss money with your children and share your own experiences, then this will surely give them a lot of confidence. A research report advises parents to not have a whispered conversation about money in the corner with their spouses. Instead, talk about it at the dinner table and let your children participate in the conversation.
Include children in the budget planning
Budgeting is the most important aspect of smart money management. Parents should guide their children to set monthly budgets. If needed, help them categorise their expenses, put a cap on each category and monitor their expenses across categories. For children to become mindful spenders, it’s important that they understand the difference between needs and wants. They need to learn to plan their expenses within the household budget.
Make your children earn their allowances
Children will value money, if they realise that it is not an infinite resource. If parents want their children to become savers, then they should provide avenues to their children to earn allowances. This not only gives children the freedom to manage their money independently but also teaches them the importance of hard work.
Leverage digital avenues to manage a child’s expenses
Parents can leverage digital and mobile based money management solutions to initiate their teenaged children into smart money management. Parents can give allowances and emergency cash to children instantly using these solutions. Further, they can receive updates on the “expenses” made by their children using these digital channels via a few clicks on their smartphone. What’s more, they can analyse the spend pattern of their children across categories such as food, shopping, entertainment, etc, and have meaningful conversations on smart money management with their children.
These simple steps can help parents to introduce children to smart money management and raise a financially prudent young generation of Indians.
(The writer is Founder, Slonkit.)
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