Money Management for Kids: Despite being a crucial life skill, money management is not covered in our official school curriculum. Parents must encourage financial education in their children from an early age since children learn money management skills from their parents. Here are some easy activities you can do to help your children become financially literate:
Hands-On Learning with Coins
Let them sort coins after teaching them their worth. They will learn how to count money in addition to getting a better understanding of what it is. Established ideas such as piggy banks assist children in becoming acquainted with money from an early age.
Instilling the Value of Earning
It’s important to instill in your children the value of earning money early on, as this will help them comprehend the concepts of income, budgeting, and living within one’s means. Allow them to earn their allowance by helping you with supermarket runs, doing small chores like cleaning their room, etc.
Teaching Financial Fundamentals
Teach your children the fundamentals of investing, taxation, savings, and other topics gradually. Give your kids an incentive to keep their allowance rather than squander it if they have any saved up. They should contribute Rs 50 for every Rs 1,000 they save, highlighting the notion that conserving money can result in better financial outcomes. For them, it also makes compounding easier because they are incentivized to save for a longer time by receiving an interest of Rs 50 every month.
Introducing Systematic Investment
Encourage your kid to start a systematic investment plan (SIP) so they can invest some of their money on a regular basis. Describe the long-term growth prospects for the money they invest. By giving people ownership shares in a business they are enthusiastic about, you may increase the engagement factor of investing. Children learn important financial lessons from these practical, hands-on experiences as they see their money work for them and help them reach their objectives, like saving for college or even their first car.