Teaching the value of money to your children
In todayÔÇÖs uncertain world, judicious management of money is critical. As an expat parent itÔÇÖs imperative to teach your child the important lessons in financial planning, preparing them to face challenges of adulthood. Make sure your children have a good understanding of the nuances of budgeting, saving and spending, so their financial future is more secure.
According to Beth Kobliner, author of the New York Times bestseller ÔÇ£Get a Financial LifeÔÇØ, and a member of the PresidentÔÇÖs Advisory Council on Financial Capability, ÔÇ£The sooner parents start taking advantage of everyday teachable money moments (for example, give a six-year-old $2 and let her choose which fruit to buy), the better off our kids will be. Parents are the number one influence on their childrenÔÇÖs financial behaviour, so itÔÇÖs up to us to raise a generation of mindful consumers, investors, savers, and givers,ÔÇØ
Children develop understanding with age. Hence as a parent itÔÇÖs best you teach them about money management as early as possible. We suggest you to playfully begin their financial education as early as when they are three years old. To help you get started, we give below a breakup of what you could teach your children at different ages:
Ages 3-7 (Pre-school age):
- We need money to buy things
- We need to wait for the right time to buy things
- There are different denominations and value for money
Ages 8-11 (Primary school age):
- Comparing prices before you buy things is a good habit
- Money is limited, so you need to spend money wisely
- We need to earn money
- The sooner you start saving money, the faster your money will grow
Age 12-18 (High school age):
- Start saving habits early in life
- Cash is always better than credit
- Differences between credit cards and debit cards, and how credit card spending is nothing but borrowing money, which needs to be paid back with interest
- Storing a copy of all your receipts and checking your expenses at the end of every month
- Keeping track of your mobile phone payments
- Opening a bank account
- Always working out a budget before you start spending
Given that the world is a global village, with people working across countries and students going to study and travel abroad, dealing with different currencies is de rigueur. Parents should sit their children down and discuss about currencies, exchange rates and how money transfers work and how to find a right remittance provider.
Teaching your children about money is very crucial and the more they know about money, and the sooner they develop better saving habits, the more secure their future will be!