Each one of us has an expiry date on earth and one day it will be our children who will inherit everything we have built and saved. The inheritance we pass to them, can either become a blessing in their lives, or can ruin them for an entire lifetime.
The difference will lie in the fact that if we as parents fulfilled our duties. If we have taught them to handle their money now, so they can win in life later. Leaving a legacy doesn’t only mean leaving kids with lots of money, rather it should entail, whatever we have we left our kids with- a lot or a little less, have we taught them to manage that money and turn it into a gift for themselves.
Imparting money education
The main purpose of imparting money education right from an early age is – any education delivered to children when they are young will impact them better compared to when taught at an older age. It works because children are more open to learning new things. Giving financial education from a young age will positively influence their financial behavior when they are older.
However, there is a weird trend prevalent worldwide. Despite knowing the importance of gaining financial skills in life, it’s shocking that there is no culture of financial education in schools or at home.
Parents SHOULD talk about money with their kids regardless of income status, kid’s age or time availability. No insurance can secure their life as much as education about money can. It is one of the most important life gifts that you can give them. Being a parent, it’s your responsibility. Learning about money from an early school going age will help them in making informed decisions about how to save, when to borrow and how to invest.
From where to start?
There is a culture of savings in India. The rationale behind this is, it is considered that this amount will come handy in emergencies. So, some surplus money is always kept aside.
But what about those who live on hand to mouth situation. Most lower middle class families in India are left with little to no savings at month end. That’s why it has become all the more important to learn yourself and teach your kids personal finance and money management. Everybody needs a plan to streamline their income, such that they always have some surplus. Start at whatever age and whenever you get an opportunity to teach your kids about financial wisdom.
According to a child psychologist, children as young as 3 years old can catch concepts of money management- like saving and spending. She says, the sooner the parents cash-in on everyday teachable money situation and start imparting financial education to kids, the better-off their kids’ future will be. It is so because parents are number one influence in children’s lives. Most beliefs and traits are formed at a young age when they are at school and at home. It’s up to us if we want to raise a generation of smart investors and savers, or irrational spendthrifts.
- You can teach your children by including them in debates over general household expenses- like what to buy and what to leave, and why some purchases have to be deferred to future dates.
- Discuss with them different priorities of all family members and let them try to strike a balance between them all.
- Start giving them choices right from an early age. Make your kid choose from a school trip or a computer game/dollhouse.
- Break the link between spending money and instant gratification. Teach them that they might have to wait to buy something they want.
- You can teach about borrowing and giving to older kids who can understand mathematical concepts and see things from other’s point of view.
- Teach your teenagers that they can use credit cards only if they can afford to pay-back the balance every month end.
Supplementing everyday education
Teach these lessons by supplementing everyday education with different activities and financial games. Ultimately, if you notice, the activities like spending, borrowing, investing are an intricate part of our daily life. Learning these, will help your kids to make sure they have enough funds for fulfilling both present and future needs.
An early financial education will help them generate a sense of financial well-being. Just like learning about mobiles, computers, are no rocket science for them now, money will be no rocket science for them as well! They will generate a sense of financial well-being.
Teach your kids everything you now feel that your parents should have taught you about money and finances. After all, it’s the best legacy you can leave for your kid and the world.