As parents, you obviously want the best for your child and there is nothing that can be done than teaching your child about managing money and inhibiting good financial habits. But, it is harder than said. We came up with some of the suggestions through which you can easily start teaching financial literacy to your child.
Giving them pocket money and let them save
Earn, spend and repeat. Because of this habit, many people are trapped in a rat race of chasing money. It is a good idea to encourage your children to set aside a portion of their pocket money for future purchases. If you teach your children how to save money for future purchases, they will be able to spend some time on thinking about what they are saving for and is it worthy enough? They will be able to turn their purchases into assets rather than end up buying liabilities.
READ MORE: 4 reasons why your child should be financially educated
Talk about money at dinner table
Though it is important to learn about money, it is often overlooked at home. The reason is simple: talking about money is more complicated than having a conversation about other things. Money conversations at the dinner table may seem awkward at first, but doing so regularly will familiarise you and your children with the subject. This piques their interest in learning more about and improving their financial literacy.
Use money game to teach them financial aspects
Games like Monopoly not only intrigue their interest in finance but also familiarise them with some of its fundamental concepts. Furthermore, it teaches us how to use our money to invest in assets and prepares the way for us to earn more.
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Cultivate a right attitude towards money
Is money a way for them to enjoy luxuries? Is money a way for them to gain status? Or is money a means of providing security and the freedom to make independent decisions and choices for them? To create wealth, it is critical to cultivate the proper attitude toward money. The first step toward financial literacy is to cultivate the right mindset, so that they can prioritise their financial independence.
Focus on fundamental concepts of money
To teach complexity, you must start with the very basics. Your kid must initially understand the concept of saving money, then teach them the right purpose of saving money. Furthermore you can proceed with the concepts like loan, bank, return, profit, loss, etc. Games, fun activities, and informal communication can all be used to teach them. Understanding these fundamental concepts will benefit them in the future.
READ MORE: Financial planning: How to plan for your child’s future?
Children need to see you make wise financial decisions if you want them to learn excellent spending and saving habits. In other words, put your words into action. and consistently preach. It can take some time to teach your kids about personal money. However, if you put up the effort and consistently convey a clear message about money, you will build beneficial behaviours in your children.
Anushka Trivedi is a freelance financial content writer. She can be reached at anushkatrivedi.com
