Make your child money-responsible
The lockdown has changed our lives dramatically. But it has also allowed us to spend quality time with our family. So, why not turn this into a golden chance and inculcate a sense of financial responsibility in your children? As parents, we aspire to ensure that our kids have everything they want in life. But at the same time, we need to learn to say ‘No’ at the right time and teach them how to spend money and invest wisely.
Let them earn money at a young age
Let the kids help in household chores and earn money. For example, pay them for doing the dishes, cleaning their room, and so forth. Kids learn the importance of money when it is hard-earned. Also, when they help in household chores, they’ll realize the efforts you are putting in.
Stories with a moral
Kids connect and learn better with stories. Tell them stories that inculcate the habit of saving. From the ant that saves to survive on rainy days to the honey bee that collects nectar to make honey, these are great lessons propagating savings.
Open a savings account
If you haven’t yet opened a savings account for your kids, then do it now online. Set saving goals for your children. Reward them when they save money by chipping in an equal amount. Give them exposure to how banking works and get them ready for the future.
Invest in an SIP together
Involve them in the process of investing in a mutual fund SIP for their future. The SIP could also be a great avenue for them to invest their money as well. Let them understand the virtues of financial discipline, long-term investing, and the power of compounding.
Teach them by example
Action speaks louder than words. Your kids are watching you. Each time you splurge on an expensive gadget or buy on an impulse, your kids are watching you. Spend wisely. Let your kids know when you are deferring a buying decision. Teach them to be contented with whatever is available.
Discuss your finances
Kids must have a fair idea of your financial status when they are in their teens. Share with them your financial goals, how much you can afford for their higher education, what plans you have for your retirement, etc. Sharing with kids makes them understand your limitations, as well as their responsibilities.
Talk about the economy and markets
It’s never too early to talk about financial markets, the global economy, and how the current situation is affecting your investment portfolio, the job market, the real estate sector, and the people around you. But make sure you do it in a way that your child can understand and appreciate.
The Covid experience has given us an opportunity to teach our children some essential life skills. Talking to them about finances and inculcating a healthy investment habit at an early age will make them wiser and financially responsible.
Now is the time to invest, in your financial future and your child’s development.