Monday, October 1st, 2012

From Piggy Banks to Real Banks

MAYBE THE LITTLE REWARDS FOR GOOD GRADES EARNED BY YOUR DAUGHTER during her early years would help her reach the top of her class. Also, her all round personality will keep her at the top in her college. She will be accepted to a University that would pave the way for lucrative career opportunities and would get her a chance to be among an elite group of well-paid professionals. But, surprisingly, with all these traits, still she may fail to manage her hard earned money! Yes, by no means, any professional or academic achievement guarantees your child will become financially secure and will be smart with money management. For that you, as a parent, need to come in first action and teach them how to be money smart.

To guide you in raising financially savvy kids Priya Singh along with Dr Vandana Tara, Clinical Psychologist, Moolchand Medcity, New Delhi jots down easy to follow tips.  Read on…

7 tips to raise money smart kids

Remember the concept of ‘the sooner, the better’ and start teaching the following guidelines today. Hurry!

  1. Show them money going in, not just out. If your kids only see you with drawing those amounts from the ATM, they’re going to think machines hand out money. Make sure they also see you depositing funds and managing cheque books.
  2. Teach them to set goals and save for them. Teach them that regular saving should be as automatic as brushing their teeth. Label a box with a set amount of money to be used for something specific. Start small – say to buy some ice cream and chocolates. Collect in the box and count it out before buying the treat. Keep this money separate when you go to the shop, so your child can buy the ice cream himself with his cash.
  3.  Encourage to make choices, not sacrifices. Instead of saying ‘We can’t afford that,’ it’s too expensive,’ or just saying ‘no’, try substitute a comment that expresses an intentional choice. For example: ‘I want to stay home and visit the amusement park this year so we can save for a special vacation next year. ‘I choose to bring my tea or water with me and not buy it at the shop so I can save that money for more important things.’ Instead of feeling that ‘no’ means sacrifice, scarcity, or embarrassment, children learn that life is about making choices.
  4. Show them you’re planning for the future. In addition to using a change box to save for special treats, let your kids hear you talk about saving for a new house, paying off the car, putting money aside to celebrate a birthday, saving for their education, and paying bills on time.
  5. Teach them to share with others. Learning to save and share goes hand in hand. Along with that box for ice cream, label another box for charity. Make sure your children put a fixed percentage of their earnings and pocket money in it. And make sure they see you giving to others, whether to unprivileged children or volunteering for a charitable cause.
  6. Give fixed pocket money—and stick to it. A fixed pocket money helps kids learn how to make choices. Don’t give kids more money just because they ask for it.
  7. Encourage your teens to shop on their own When young ones start taking responsibility for themselves along with gaining confidence they also learn how to manage money within a limited time (for example weekly or monthly) and within set limits  (amount).
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Category: Good Parenting
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