Know your Children’s Money Habits..!
As a
parent, one realises the fact that each children is different even if they are
siblings. They can have contrasting habits and personalities when it comes to
their basic nature like eating habits, food preferences, toys and even the kind
of friends they make while growing up.
Understanding
this, it becomes increasingly important to deal with them; teach them aspects
of life-differently; even aspects of money matters.
By
nature, some kids are spend thrift and may not value money enough. As a parent
it becomes critical to explain them the value of money. My eleven year old
daughter spent not just the entire 100 Rs (that I had given her) on a school
fair she went to, but landed up borrowing another 30 Rs from a friend for a
ride that she wanted to take.
Though
borrowing from friends is not something scorned upon these days, but as a
parent I had to sit her down to explain to her why borrowing money was not
acceptable and why she should not spend more than what she has. If not explained
now, I felt that it could lead to serious debt issues later in her life.
As part
of my work experience, I see a lot of youth nowadays who land themselves in the
vicious cycle of credit card debt traps just because they enjoy living their
lives on borrowed money.
The other
side of the coin is my 13 year old son, who is quite careful with money but
didn’t how to channelize it. It is usual to get cash gifts from relatives on
occasions.
Now that
he was ‘grown up’, he wanted to keep the money with himself but didn’t know
what to buy. I told him that he could let the money be in his bank account,
explained to him the concept of compounding, and that the money could be
withdrawn anytime by him to buy the book / gadget of his choice when he wanted
to. He was not only elated; he made it a practice.
This
should help my son inculcate the habit of saving towards the goals that he has
in mind.
Another
interesting money habit is that of my 14 year old nephew, who likes to splurge
all the money that he has (pocket money given by his mom) not on himself but
his friends! His generosity gets mostly taken advantage of – as felt by his
mother.
Asked to
intervene, his mom and I explained to him how one must save his pocket money
for any contingencies he could encounter at school- the fare home by the bus /
money to buy some snacks in times of hunger etc. I am quite sure he will make
better friends if he helps them out in case of emergencies rather than spending
it on their whims and fancies.
Explaining
money management to children early is setting up a strong base for financially
independent adults. Base your decision entirely on the child’s money habits and
correct them at the right time. As a parent, we want them to be
financially happy, right?
About the
author..
Anupama Aggarwal, Certified Financial Planner
Anupama
Aggarwal is an MBA (Finance) and a
Certified Financial Planner working with International Money Matters, a
financial planning cum investment advisory company (http://immpl.com/). A mother of two – 14 and 12 years
old, has lived in other countries; ran an entrepreneurship firm involved in
organizing educational trips for children before re-entering the corporate world.
With experience in financial services sector, she is passionate about helping
people take better informed financial decisions.
Widely
travelled across 20 countries, she loves to read, interact with new people and
cultures and is always ready to put on her dancing shoes.
For
specific queries on personal finance, write to her on her email id:
anupama.a@immpl.com Phone: 099100-96751
Bangalore (Head Quarters)
International Money Matters Pvt. Ltd.
Phoenix Primus, 1st Floor,
No 590, 12th main,
HAL 2nd stage, Indira Nagar,
Bangalore 560038,
No 590, 12th main,
HAL 2nd stage, Indira Nagar,
Bangalore 560038,
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