Writing for Thrive Global, Mr. Gupta discusses the value in educating children on smart financial behaviour. Mr Gupta emphasises the importance of these lessons being instilled as early as possible in the formative years of children’s development.
In this article, Mr. Gupta suggests the following financial tips to teach your kids:
1. Introduce the habit of saving
The age-old technique of collecting coins and keeping them in a ‘piggy bank’ is an excellent way for children to visually conceptualise the power of saving. At the end of a year, Mr. Gupta suggests taking your children to a bank to deposit the change, then watching the account grow over time.
2. Create opportunities to earn money
To instil the value of hard work in exchange for money, a suggestion is to give your children an allowance for completing chores around the house. This exercise is intended to teach children that money is earned. And if they demonstrate extra effort with their tasks, reward them accordingly.
3. Help to make smart spending decisions
Your child may be eager to spend the money they have earned and saved. Before allowing them to buy the first thing that comes to mind, give them options. Encourage them to weigh up the option of buying something now or saving a little more to buy something better in the future. The lesson here is that personal finance is about making decisions that are beneficial in the long run.
Importantly, every family has individual financial circumstances. As such, different strategies and suggestions should be tailored to your family’s unique situation.
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