Money talk with your child -- when and how?

Gone are the days when everything was so much more affordable to buy. Today our children are living in a world full of distractions and easy accessibility. Everything has become expensive and in the times to come it will continue to increase further. Keeping this in mind, it is all the more important now to teach them the value of money, that money is a precious gem that can provide us with the tools to fulfil most of our materialistic desires.

How Can I Teach The Value Of Money To My Child?

I would like to share 5 basic ways in which we can achieve this goal. They helped me teach my child the value of money, and I hope they help you too -

1. Household chores: Attach your child’s weekly allowance with the household chores. Let your child pick up a chore that s/he wants to do; it could be buying groceries from the market or may be taking care of electricity wastage at home. Don’t buy them everything that they want and encourage them to work for, and save for their expenses. They will gradually try understanding that we need to work for money and it requires effort and hard work
2. Paying grocery bills: Whenever your child is with you while grocery shopping, take his/her assistance in buying things from the store. Ask him/her to compare the prices of two brands and check which one offers more value for money. Let him/her pay the bills and cross check the amount to be paid. If you are paying by cash, hand over the money to him/her and let him/her pay. You could just double check before making the payment
3. Credit card bills: Ok so this one is slightly different from the previous tip. We buy things on credit when we don’t want to give away the cash in hand and it is generally used for things which are slightly out of our budget. Paying bills and making your child understand that why you need a credit card to pay certain bills especially when the commodity is out of budget can be tricky. Here’s what you can do--
   • When you pay your credit card bills, involve your son/daughter in this and help them understand that this money will be paid by you with some interest but at a later stage and not at that moment
   • Help them understand this process of making credit card purchases and paying back with interest
   • Your children may not understand all of it but the intention is for them to just get introduced to the value of money
4. Monthly allocation of funds: At the beginning of every month, when you allocate the money for payments or salaries for different people for example - the maid, milk vendor etc. take your children’s help in this. You can do so by following these simple steps
   • Compare previous month’s bills: Comparing the previous months like the electricity bill with the current bill will give them a rough idea of electricity consumption and they themselves will come up with the ideas to reduce the consumption thus reducing the bill amount.
   • Take a stock of daily utilities before buying anything new: When your child takes a stock of daily utilities he or she knows exactly how much of each item is present at home and how much more will be needed to last it for a month. It teaches them to value the money and not the price of a commodity
   • Chance of discounts at any stores: You can also encourage your child to identify any possibility of buying things at discounted rates offered by various online stores and pamphlets/coupons of local vendors. By buying things at a discounted rate you are teaching your child to save money and showing them that same things can be bought at two different prices – one elevated and one discounted
5. Piggy bank: Last but not the least; introduce your children to the traditional way of saving money in piggy banks. The piggy bank concept allows the money to go out of their vision, so that children don’t impulsively spend everything in hand. The theory of out of sight out of mind often works!

How Can I Make My Child Money Smart?

So you have taught the value of money to your child and assuming that your child understands it as well. Now it is time to take a step forward and teach your child to be money smart. Now how do you do that? Simple follow these—

1. Teach how money is earned: Your child needs to know that every paisa or rupee you spend anywhere is hard earned. You and your spouse go to work to earn that money. The maid and other labourers do odd jobs to earn that money but everyone needs to earn it
2. Money once spent can’t be replaced on its own: Money that is spent from your wallet or from the bank will not be replaced unless you get your salary from your boss. He or she needs to know that ATM machine is giving back your money saved in the bank account
3. Small Allowance: When your child gets a small allowance he or she starts understanding the value of money and start thinking of either saving or increasing the money or in many cases both. So encourage their thoughts
4. Encourage him or her to increase money: When your child starts thinking of increasing his or her allowance encourage them by suggesting him or her ways to earn more cash. They can either help you with household chores or get things for the home from super market

All these suggestions above might at times sound a bit overwhelming, but remember what is important is how you implement them. Allow your child to make mistakes and trust that your careful guidance will train them well. All along your aim is only to help your children identify the real value of money and the amount of hard work it requires to earn it. Learning the value of money at a young age will also teach them gratitude in a gentle and loving way for whatever they have been blessed with and whatever their parents are able to do for them in the best of their capacities.

Did you find Sugandha’s blog on teaching children the value of money useful? How do you help your child understand the value of money and savings? Do leave your comments…. We love hearing from you!