Have you ever thought that ”If I had had financial education Kid’s Financial Education from a young age, I would have made a lot of money”. Are your elders keeping you out of financial matters?. Also they say “If you study well and get good grades then you will get a good job and you can earn more money”.

But the fact is that there are many people who have a high salary job who are  looking for money in the last days of every month. Also there are those who have low salary job have no financial problems. Can you guess the reason?. Just lack of financial awareness and financial discipline.

Importance Of Kid’s Financial Education

Is it necessary to be financially literate from an early age?. Talking about money is considered wrong in many families. In some cultures, it is seen as a sin. We completely depend upon money, so how can it be a sin?.

We want our children to become doctors, engineers, lawyers..,etc we want them to be in big positions with big salary.  How many people do we see who are in financial troubles despite having a high income. Inspite of higher income, due to lack of proper financial education they are facing a lot of difficulties after retirement.

As for me, I learned the importance of financial education in my 30s. After facing lot of money related troubles after getting married and having children. I always think that if I had known earlier, I would have managed better. Then I realized that the earlier, the better. Mistakes made at young age can be rectified.

Importance Of Money Management(Financial Education)

We don’t think it’s necessary to talk about money with children. How will they know if we don’t teach them how to deal with money. We are one of the reasons for their poor money management.

 

If we teach children how much money to save and how much to spend, that knowledge will lay the foundation for their financial success.

Proper financial education will always protect children, whether they are employee, doing business or whatever profession they are in. To face the financial problems efficiently, we have to teach them some financial habits.

 

Children Imitate Parents

Children do the same way as we deal with the money. Our words and deeds rooted deeply into their minds. While discussing about money, negative phrases like “money does not grow on trees” have induced fear in their minds.

They would feel like that the money making is very very difficult. Children could not forget the beliefs that were formed in their childhood. Although they are smart, it seems impossible for them to become rich. Even they fear about investment. So they keep their lifetime savings in the FDs which can’t beat inflation.

Discussions About Money With Kids

We let them know that the money making is not that much difficult. We should discuss about the different fair ways of making money otherwise they search for easy money tools like betting, lottery etc. Teach them clearly about expenses, savings and investment.

Do you think making money depends on qualification or talent or luck? You only need proper mindset. Children should know that the money is the part of life and it makes our life comfortable. Introduce the money matters to your child slowly. Let them count the currency notes, let them bring the small items from nearby store. Then they will get used to money transactions.

Good Financial Habit

For wealth creation and for maintaining wealth, savings are most important. The habit of saving should be planted in their minds from childhood. We should train them that immediately after receiving money, first save money and then use the remaining money for expenses.

When they want to buy a toy, make them wait patiently until they get enough after saving money to buy that toy. For example a toy cost Rs. 200/-, give him/her Rs. 100/- for every 3 days and ask him to save Rs. 50/- from that given Rs. 100/-. To get enough money to buy the toy, he/she has to wait for 12days.

This type of exercises keep him/her away from instant gratification. Because wealth creation takes time. So, they keep themselves away from bad loans and credit card traps.

Use this savings strategy up to 15yrs of their age, so they get used to savings habit in their life. Train them not to spend their savings at any cost. Those savings are very useful during their next stage of financial education i.e., investing from the age of 16yrs onwards.

Thank you for reading. For any suggestions, please leave a comment below. For any queries, please contact us at kidsfinancialeducation@avihsmo.com.