Fun and simple ways to initiate kids into financial lessons

Financial literacy is an essential skill for children&nbsp;to ensure that they develop healthy habits around money&nbsp;as adults.&nbsp;Teaching your children to be financially responsible early on will help them deal with monetary challenges&nbsp;successfully&nbsp;in the future&nbsp;allowing them to make the right decisions at the right time.&nbsp;However, it takes a lot of patience&nbsp;and sensitivity&nbsp;to inculcate&nbsp;money lessons to kids in an age-appropriate manner. Also,&nbsp;you need to model the right financial&nbsp;behviour&nbsp;to your kids if you actually want to inculcate good monetary habits in them. But many parents aren’t sure about when and how to start.&nbsp;Experts are of the opinion that you should start&nbsp;young. Talk&nbsp;to your children about money when they are as young as 7 to 8 years of age.&nbsp;Here are some fun and simple ways to initiate them to financial lessons.&nbsp;&nbsp;



Ages 6-8&nbsp; The first lesson on financial literacy can start from pocket&nbsp;money. Give your child&nbsp;a weekly or monthly allowance according to your convenience. It will be a good idea to pay a part of the allowance in cash for spending and the rest for savings in a bank.&nbsp;For this, take your little one to a bank that allows the option of minor&nbsp;savings account for kids below 18 years of age. This can be a good opportunity to teach her about&nbsp;the concept of interest in saving that the bank pays.&nbsp;&nbsp;



The next step would be to&nbsp;discuss&nbsp;with&nbsp;your kid about&nbsp;what he wants to do with the&nbsp;money.&nbsp;Make sure that this&nbsp;conversation&nbsp;is a lesson on&nbsp;responsible spending, budgeting,&nbsp;saving&nbsp;and impulse control.&nbsp;Help&nbsp;your child decide how much he wants to spend&nbsp;and the amount he wishes to save. Follow this up with a discussion on the areas of expenditure and the goal&nbsp;for&nbsp;saving.&nbsp;Once your&nbsp;kid has saved enough to meet his goal, start a conversation&nbsp;the difference between necessity and desire. You can ask him something like this, “Do you think you&nbsp;should deplete your savings&nbsp;for&nbsp;this?” However, let your child take the final call. Do not impose your views or decisions on him. This exercise will improve his decision-making skills while giving him an opportunity to bear the fruit or consequence of the call he takes.&nbsp;Additionally, encourage him to take up coin collection as a hobby. Gift him a nice piggy bank to store coins.&nbsp;&nbsp;



Ages&nbsp;9-12&nbsp; During this phase, your child will develop&nbsp;some mature thinking skills. It won’t be a bad idea to include her in&nbsp;a few&nbsp;of your family’s budgeting decisions&nbsp;while it comes to travelling, planning a family entertainment or even shopping for festivals. Discuss the&nbsp;options as well as&nbsp;your affordability&nbsp;and then ask for her inputs.&nbsp;Exposing your kid to these real-life situations will enable her to make judicious financial decisions. For example, she will be equipped to figure out if&nbsp;she wants to spend her money&nbsp;for&nbsp;one expensive&nbsp;dress or many outfits that will last for the whole year. You need to reinforce the idea of&nbsp;need versus want time and again for her to make the right decision.&nbsp;&nbsp;



Ages 13-15&nbsp; This is the right age to introduce kids to the basics of tax and stock market.&nbsp;Talk to him about sales tax when he buys his favourite toys, books or chocolates. Explain what it, why it is levied on us&nbsp;and&nbsp;the&nbsp;rate. The next in line could be&nbsp;income tax. Listening to news channels during the budget session will&nbsp;give your child a clear concept about&nbsp;it. He will be able Apart from explaining the basics, get him to watch news channels covering budget session.&nbsp;The coverage will introduce him to the advanced concepts of&nbsp;tax slabs,&nbsp;special&nbsp;concessions and much more.&nbsp;&nbsp;



As far as stock market is concerned,&nbsp;it will be a good idea to buy the stock of a company your child is familiar with.&nbsp;It could be a brand that she buys products or services from. Start by asking, “How about owning a small part of your favourite company?” Apart from clearing the concept of stock market, this exercise is going to help her develop interest in investment.&nbsp;&nbsp;



Ages 16-18&nbsp; Talk to your&nbsp;teenager about income options. Look for&nbsp;part-time work-from-home opportunities together.&nbsp;Our jobs actually teach us to value money. Also, this is the right age to expose your child&nbsp;to the functionalities of debit and credit cards, rules, regulations and safe usage practices.&nbsp;One of the&nbsp;essential skills that your child needs to learn is blocking a card after losing it. While introducing these concepts is necessary, it, wait a little longer before you gift a credit card to your youngster. Also, this is the right age to&nbsp;take him through different types of bank loans, especially education loans.&nbsp;&nbsp;

Experts say that parents should start teaching kids to be financially responsible from an early age. 

Financial lessons for kids: An age-by-age guide

Experts are of the opinion that parents should start teaching kids to be financially responsible from an early age. Here are simple ways to inculcate money lessons.

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