Wednesday, March 16, 2011


We have grown up in an atmosphere of command economy. During our younger days all the important decision of our life were taken by our parents. What would we be when we grow up was also decided by our parent The decision of whether we should take Arts, Commerce or Science was also taken by our parents. Whether a young boy would be a Doctor or Advocate or IAS officer was really dependent on our parents mainly. We had almost no say in creating and shaping our life . In fact during our childhood and there after we were scared of our parents. Time has changed now. Now parents are scared of their children. The young children have now mental attitude to decide on their future. But yet no children are taught by parents value of creation of wealth, or developing the habit of saving from childhood.
This needs to be done. Now a days even in school, children are taken out to market and taught how to spend money , how to make a budget and also how to save money. But the best education on creation of wealth should come from the guardian or parents at home.

Use real-life experiences to demonstrate everything you want to teach. Learning by observing and doing is the most powerful tool. Such as when you go grocery shopping, and can use the opportunity to showcase planned spending, or how to recognise value for money. Or if you decide to use a credit card at a restaurant, you could show your child how a credit card works, when it can be used, and how to calculate a tip! Why the children of Industrialists are so money savvy from childhood? This is essentially because they are taught about the value of money at dinner table. The best time to teach the value of money to children is at the dinner table and while on holidays. The most of industrialists mother taught them how to make their family budget. In our family budgeting is never done. The money is spent as it comes. the time has changed and the practice of budgeting should be taught in our family now a days.

How important is it to teach your children about money, its place, and its value? Considering that money does, in a lot of ways, make the world go round, you might think it one of life’s obvious lessons, gained through experience. Or you might assume that money management is tackled in school. Think again. Arming your child with the right attitude and necessary skills at the right time will afford them with the greatest possible advantage: the opportunity and power to make decisions.

How, and when to communicate money values to children is, however, one of the toughest challenges that parents face. Educating, motivating, and empowering children to become regular savers and investors will enable them to keep more of the money they earn and do more with the money they spend.

Discuss money openly. So many parents do not discuss finances within the family either because it’s considered inappropriate, or personal. Consider this: if you don’t actively provide the correct information to your child, how is he/ she to know, understand and inculcate your values? Therefore, as soon as your child can count, introduce him/ her to money. Observation and repetition are two important ways in which children learn. As they grow older, have frank discussions about how to save it, how to make it grow, and how to spend it wisely.

We need to help our children to distinguish between needs and wants. These are habits that die hard, and influence how your child will approach money and its place in his/ her life. If they can differentiate between need-to-have and nice-to-have, then they’re halfway to a solid and secure future.

It is imperative to help our child to set his/ her own goals. If it’s a toy that they must have, then regard this as a good opportunity to teach our child how to be responsible with money, and prioritise between what they want, and mindless spending This would help developing the concept of family budget. Allow your child to make spending decisions, which means that they will learn from the choices they make. And learn that it’s to their advantage to do a little homework before buying, waiting for the right time to buy, and actually deciding if the product selected is what they really want.

As the child steps into first teen age at the age of Thirteen it would be great to take them to bank and open a joint account of his with you as guardian. Take him to ATM when you withdraw money and explain how does it work. Begin simply, though your parents might or might not have done, with a piggy bank. If you do give your child an allowance, get them to set aside a small portion of it every time. Explain and demonstrate the concept of earning interest income on savings. Provide an incentive; offer to match what your child saves on his/ her own. while paying child from time to time you can

use 12 envelopes, 1 for each month, with a larger envelope to hold all the envelopes for the year. Encourage your child to save receipts from all purchases in the envelopes and keep notes on what he/ she does with his/ her money.

The children would always Learn by observing as to how his parents keeps record, spend money .So we need to be an example for the family. when we go for grocery shopping, we can use the opportunity to showcase planned spending, or how to recognise value for money. Or if you decide to use a credit card at a restaurant, you could show your child how a credit card works, when it can be used, and how to calculate a tip! Do not forget to tll him that credit card payments must be made immediately and that credit card should not be given to anyone not even to his mother.

It should be taught to your child that that spending money can be fun and very productive when spending is well-planned, and that a penny saved is, indeed, a penny earned!. Take your child to Post office and show him how you saved your initial money in a post office account. Take him to bank and make him understand what is the credit card and what is the debit card. The world is changing fast. In case you don't teach your children value of money the world will pass by and children would remain old fashioned. Would you really like this to happen to your children ?


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