scorecardresearchYour Questions Answered: I’m 33 and want to teach my child money management.

Your Questions Answered: I’m 33 and want to teach my child money management. Is it the right time?

Updated: 21 Mar 2023, 02:35 PM IST

It is never too early to start teaching children about money management, so take baby steps and help them learn in a fun and engaging way while instilling values of prioritising family and friendship over money.

Important financial terms you must teach your child

Important financial terms you must teach your child

Q. I am 33 and my child is 8. I want to teach my child money management. However, my family thinks it is not the right time to put money in their hands. Is it too early? What is the right time?

It’s never too early to learn money management. The sooner children start learning, the easier it will be for them to handle money well when they grow up. Yes, the family will be worried about them spending the money on the wrong things but, if you are keeping an eye, allow them to make small mistakes and learn big lessons from those.

Take baby steps. Start by teaching them about the different types of money (coins or bills), and how to count and save those. Then introduce the idea of budgeting by giving them a small amount of money and helping them decide how to spend it wisely. 

Help them learn in a fun and engaging way. Just talking to them may not help; what would be a game like monopoly that you can play with them. Introduce a barter system to help them know the importance of prioritising how they use the limited money in hand. 

Start small and gradually increase their responsibility and independence. Piggy banks are still a great way to save the money they get on special occasions from different family members. They will go on to start earning their own money by taking up small jobs, as simple as household chores. 

Remember to instil certain values. Let them know that family and friendship matter more than just money. Teach them how money can be used wisely to help others and themselves. 

As the years pass, add different elements like investing (going beyond savings), and creating a corpus for specific goals (raising half the cost of the bicycle they want to buy, for example). 

As a parent, it is very important that you are seen to practise what you preach. Children learn a lot by observing their parents' behaviour and attitudes. Consistently demonstrate responsible financial habits such as budgeting, saving, and avoiding debt.

Overall, teaching children about money management is an ongoing process that requires patience, guidance, and consistent reinforcement. Starting early and building gradually on their skills and knowledge can set them up for a lifetime of financial success.

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First Published: 21 Mar 2023, 02:09 PM IST