Money Management For Children

No matter how much it seems that our teenage children do not listen to our advice or discussions regarding their financial affairs, the truth is that they do take all of it seriously and surveys tell that they turn for guidance to their elders regarding their own savings and investments too.

It is always good on your part as a parent to teach your kids a few money management mantras much before they actually take on the financial responsibilities of their lives themselves.

Here is how you can do that at an early stage.

• You can start by telling your kids about budget.


• Keep it simple, just tell them to manage their expenses according to the money they get monthly.


• Also, make them understand the importance of savings and make them save some money over and above what they spend.


• You can also give them a goal to save for. For instance, something they wanted you to buy them. Tell them that they'll have to save for it themselves.


• It will act as an incentive for them and they'll learn the joy of saving.


• Teach them not only about basic savings but also about earning interest over it.


• Since the money they save tomorrow may not be of the same value after some time, it is important to earn interest over it. Therefore, a piggy bank may not be the right solution.


• After they save up a substantial amount in a piggy bank for starters, introduce them to a savings bank account. It will teach them a lot about banking also and at the same time make them save up larger amounts.


• As they grow up, you can gradually introduce them to share markets and mutual funds. It can be fun for them and they will become experts in terms of financial management by the time they reach adulthood.

Managing money will also let them know by how much their expenses exceed their income and will encourage them at an early stage to start working towards increasing their income.

This way, you will not only teach him better financial management but also the importance of money.