Did you teach your child to be financially literate ?

While for most of us, financial literacy arrived as practical lessons in adulthood, today’s world requires an earlier learning for children.

Financial literacy gives you the knowledge and skills you need to make effective decisions around money. While personal financial literacy is all about learning to handle your own bank account and balance payments and incomes, it also expands into long term planning and learning the art of saving and investing.

Children who learn the art of saving and thrift early enough will remain well equipped into the future. Saving as a habit is a means to ensure that there is a sound approach to remaining financially secure, while also inculcating in them the need to spend wisely. Here are some smart ways to get your children to start thinking about financial literacy, and to imbibe it’s basic norms

Piggy banks: the good old piggy bank will never go out of use. A simple method to teach children how to save penny by penny, the piggy bank is one of the earliest and easiest ways to encourage thriftiness and prudence. Start small by letting them save a rupee a week and slowly, to save more and more with time.

Let them determine how they will make use of money they save, and what use they will put it to. Saving by itself will encourage them to see how precious every penny is and so spending the money for frivolities may not rise.

Earn their keep

Children can gain a lot in terms of lessons on hard work, perseverance and engaging in the process of earning. This doesn’t mean that child labour is the way to go but let them understand that pocket money doesn’t just fall off trees. Making things by hand and putting up a stall over the summer, helping fix broken things around the house, or even running errands can have their own rewards.

By allowing them to earn their pocket money, you are teaching them hard work and the value of effort and sending a powerful message to the effect that they cannot take shortcuts in life.

Earning adds a sense of treasured value for what you have earned you seldom squander what you painstakingly earn and derive after investing hard work. When you give your children money on earned basis, you also teach them the value of hard work and perseverance, and give them the life skills that centre around independence and a sense of self discipline.

Give them goals

Get your children to throughly value savings by giving them a goal to attain. Let them start with a small amount to be saved at first, and slowly expand into a larger amount to be saved at first and slowly, expand into a larger amount, increasing it gradually.

Make them, at some point, also set their own financial goals in terms of how much they want to save, and to what end. The next step is to let them understand how that money can be used for a rainy day, or to encash when they want to buy themselves something big.