(The author is a financial planning coach. Founder and CEO of Money Avenues, a Wealth Management firm based in Chennai. Mail at: mailvgopal@gmail.com)
Financial matters are no longer matters pertaining only to adults, and
nevertheless not all adults are glued on to the financial matters
themselves. Kids of this age are growing fast and smart, compared with
our childhood and the generations before that and the world around them
has changed their lives and outlook drastically.
It's important to involve kids in the process of financial planning in whatever way they can understand and appreciate depending on their age. It's also the time you should act as a responsible financial parent and teach them the basics of money, money management and values of life.
Here are seven tips for becoming a responsible financial parent:
It's important to involve kids in the process of financial planning in whatever way they can understand and appreciate depending on their age. It's also the time you should act as a responsible financial parent and teach them the basics of money, money management and values of life.
Here are seven tips for becoming a responsible financial parent:
Open them with a bank account and get them familiarized with the money, however little it may be and however young they may be. That's their baby step in understanding money matters. It also gives them a sense of pride of having a bank account @ an young age which itself could be a good sign of financial responsibility. More than anything else, this would teach them the importance of independence at a very young age...
2. Give them a daily/weekly/monthly budget to spend:
Assign them a budget to be spent on a daily/weekly/monthly basis. This sends a very important message to them, that they have to live within the means. They understand, at an early age, as to what is being spent and how it is being spent. Two, that the money is not easy and should not be taken for granted, is another important message. Three, they adjust to spend within the allocated budget.
3. Make them achieve a target and reward them too:
Give them reasonable and attainable targets for doing things and reward them with cash prizes (and of course to be put into their bank account :-) . Targets could be on their studies, extra curricular activities etc.
Messages are three in this: One, they develop the competitive spirit @ early stages. Two, money comes as a reward and not as a free gift. Three, you excel and get rewarded.
4. Say No to "One" habit of theirs which may have a serious financial implication:
Knock off one unwanted habit of your kid which has a financial implication for you. It could be a food habit or a wasteful entertainment expenditure or anything which drains your money. Act now; say no to that habit, which will go a long way in understanding the importance of financial responsibility.
5. Encourage the kid to acquire a new skill:
Future is about the skills the kids acquire now. Encourage your kids to take up learning a new skill which can be career oriented and beneficial @ a later stage. A foreign language can be a good example. But any skill which can add value to their future will be a good investment. And don't forget to reward them for making progress in the new skill development.
6. Teach them the most important value "Money isn't everything":
Use story telling and your own experiences with them to emphasize that there is a life beyond money. Encourage them to look at society at large in promoting peace and harmony and human values.
Remember, money and wealth you leave behind for them may not last beyond a point. But the values you leave behind for them will go on for generations.... Think about it.
7. Plan for their future and tell them too:
Make a financial plan for securing their future by doing the following things:
a. Make sure you have enough and more life insurance cover for your family's financial benefit. It's a paramount security for your family.
b. Make a regular saving for their future which can grow as a big corpus @ a later stage.
c. Make separate plans for their college education, post graduation, foreign education and marriage expenses.
Most importantly, broadly share with your kids of the plans you have made for them. It's to let them know that you are responsible and meticulous about their future.
Do speak to the experts @ Money Avenues to secure your kids' financial future...
(The author is a financial planning coach. Founder and CEO of Money Avenues, a Wealth Management firm based in Chennai. Mail at: mailvgopal@gmail.com)
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