Financial education is a part of cultural outlook where some cultures find it important to be passed after certain time and some don’t. India is a country where different cultures co-exist in a very large frame. Some Indians don’t feel the need to tell their children about finance and keep them at safe distance. Whereas some put everything out in front of their children at a very early age.
You need to understand that advent of internet has open a large window for people of all groups including our children. People are exposed everyday to new technologies, concepts and due to which it is difficult to decide what is real. Ill informed children can become victim of Ponzi schemes which can affect their outlook on making financial decisions as adults.
Let’s see how you can start a conversation on financial education with your children.
Tell Them To Differentiate Between Need And Wants
You need top take your children for shopping and explain different commodities. Take them to a supermarket and show things that we want and things that we need. Tell them why it is important to differentiate between your need and wants. It will help them to look at things differently when they are out on their own.
Money Has No Gender; Teach Your Girls Too
Women do not take an active part in financial management platforms. At new age Fintech companies the number of women customer base is always smaller as compared to men. I did some brainstorming and concluded that most women are homemakers in India and they do not know how to invest their money. Women are master at making savings but they do not put their money at right places because of lack of knowledge. Make sure that you are giving financial education to your children without making any discrimination between genders.
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Give Them Rewards On Reaching Set Milestone
In order to check whether your teachings are going anywhere in heads of your children you need to offer a sweet deal. Set milestone for them and check whether they are working on their habits. If you observe a good change in their behavior then you can reward them with some gifts or extra cash. This will keep them on toes and everyone likes some extra cash.
Teach Them Golden Rule Of 50-30-20
This is for children who are going to college and are finally living out of their parent’s home. Tell them that 50% of their pocket money should be kept for needs and 30% for their wants. The rest 20% should be put in savings to cover for rainy days.
Children learn what they see so you should check your behavior as well. If they will see that their parents are sensible in their spending they will take your financial education class seriously. You need to be a role model to them and every now and then tell them about outcomes of your financial knowledge and planning. This will keep them motivated and they will walk on a good path in future.
