Something that parents rightly start early is getting piggy banks for children, but it can keep money-curiousity at bay only till the toddler stage. So what is a way out for growing kids to learn their money lessons right?
Technically a child can have bank account in her / his name. But it’s not that the kid would start operating the account on his own. An alternate way is to open a joint account with your child with either or survivor option and remove your name when he turns 18. In the course, he would learn his money lessons.
1. Start savings in the account
Make real credits into the account. Cash rewards for completing milestones or cash gifts should be deposited into account.
A monthly statement to show credits in account is a great motivation. With mobile apps, the job is even easier.
2. Budgeting & Rewarding
Other than deposits, the account should be used for budgeting calculated expenses like sponsoring wish lists. Purchases like the sports kit or the training shoes can be done when rewards are due. I remember reading that delaying gratification disciplines children.
3. Role Play
Sometimes without actual transactions, children can be allowed to play with their debit card while playing.
ATM pins sharing is a no-no, but they could certainly role play swiping of the card.
Siblings could compete for higher earnings and bank balance. They can even dabble with credits and loans among each other. The real exchange of money and change in bank balance will teach them a thing or two about money.
4. Prize money
Opening a dedicated account for the children is also a great way to prepare them for competitive exams & scholarships. They know that their prize money will not be taken away and will be secured in their personal accounts.
There’s a general phobia of using banking & financial products in our country. This is one area where possibly school curriculum could take note. It would definitely be worth the while to induct simple banking for our young ones.
Hola Momies! First up we have to lay it out..
An W-investor is a combo of:
- Woman investor
- Winning investor
If you are new to investing, then we have a fun checklist here for you to find out if you have the makings of becoming an W-investor. Read on,
● You make a budget every month for expenses: if yes then you have a discipline to identify your cash flow. You can surely graduate to Goal-setting for your family and tread on the path of Financial Planning – a must for becoming an W-investor.
- You have a kitchen garden: or some home plants. When you nurture plants, you learn to have patience because there are no quick spurts, fruition takes time. This is true for investing also. A sense of time horizon is key for an W-investor – you get returns over time.
- You compare prices in supermarket: you are either the kind who compares or you are not; there can’t be a mid way. There’s good news in store if you compare because same buying behavior will also apply to financial products and instruments. Say while purchasing Insurance you have to compare premiums or while opening an FD you have to compare rates offered by banks.
- You like experimenting different things for family: Despite knowing your choices clearly, you like to dabble with different cuisines for family, signing up for new apps, exploring news brands in groceries.. You feel calculated risks are important to experience a variety of things. You have thw truest grain of an W-investor because investing comes with some amount of risk for sure. And no risk is no gain.
- Even if small, you save a sum every month: Be a proud mom for being able to save because most people are not. There are various instruments which can work with small amounts but when consistently done, can payback well. Own the badge of W-investor guilt free because your SIP may just be the smartest investment around.
On a family holiday in US recently, I noticed my sister-in-law engaging her children in money games. Each of her two kids earned themselves $20 as Rakhi allowance. A pre-schooler and a 4th grader then set out to making the best use of their moolah.
Let me add the money was not handed out easily, it was almost labor of love because the kids were made to sit for a small puja followed by an Indian meal (right till plates were empty) and then finishing up some study time. It also came with a rider that screen time, bad behavior, sibling fights will lead to deductions from this amount. Must I add, this was the best possible outcome since we had the calmest kids in company for one whole day.
Now comes the part which pleasantly surprised me. The kids accompanied us to a nearby mall. I left the kids with their mom for their shopping while I decided to lose my way in Macy’s. The disney store, play zone, toy shop were visited one after another.
A couple of hours later we met to grab a bite together and I saw nothing purchased. I was told, “Well, we are doing a recce”. Post eating, my shopping ensued and so did theirs. Atlast, I gave up after having scoured Sears, Dillard’s and a few other stores. I met the kids & mom to find major discussions about latest spiderman costume, pack of cards, barbie set, glitter colors. Soon the money was less for our boy here and loans were sought and sanctioned from sister, but not without conditions of her taking the favourite seat in car on way back home. Somehow plans changed and our man traded the costume with a copy of ‘Diary of a wimpy kid’. Now he was in surplus. Rakhi feeling finally dawned on him and he gifted his sister much sought glitter colors, saving the balance for piggy bank.
At this point, their money was far from over. But my realization had come on the importance and ways to giving children an early start to money habits.