As a parent, one of our important roles is to help our
children learn smart money management techniques and financial management
principles. Typical desi parents’ advice their children something like:
"Money doesn't grow on trees" or "If you waste money God will
stop giving you money". I personally don't know if these advices work but
I believe that it takes a bit more effort to teach them right financial
management principles. If you feel that I am going to talk about how to become
rich (or poor), you are totally mistaken. My only goal is to share my
experiences about how to raise children as wise money managers. I outlined few
tips which can be followed by a parent at each stage of their child's growth.
Doing these might serve them well for a lifetime.
Pre-K/Kindergarten - Start with teaching them how to
identify coins & notes. Explain them how you earn money and how you use
money to buy things.
Elementary School - Concentrate on explaining them money involved
habits like spending, saving, sharing, donating etc. Use their growing math
skills to help you pay cash for items. Set up a piggy bank and a savings goal
to meet. Don't forget to help them progress towards the savings goal. Help them
sell Girl Scout cookies or run a lemonade booth in the neighborhood/community.
Middle School - Teach them comparison shopping, online
shopping, explain how a checking account works and teach them how to use the
ledger. Make them manage yard sales & garage sales.
High School - This is actually a tough stage to make teens
learn. Concentrate on explaining them credit, loans, interests, investments and
budgets. Emphasize that using a credit card is like taking a loan that has to
be paid back with interest. My favorite statement about credit cards is
"Credit card is like a gun. It can be helpful or it can kill you".
Let your teen manage small budgets at home and allow them to do mistakes. We
want them to learn from their mistakes before they leave home and start living
on their own.
Last but not least, in this fast growing computerized world
it is equally necessary to teach them the importance of personal information
and safeguarding it to prevent fraud.
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