Children should be taught the value of money. Here’s how you can motivate your child to save money Money is important. It gives people the power to make decisions and grab opportunities. Educating children on its importance should start early in life. Children should be motivated to become regular savers and investors.
Child psychologist Dr Nandgopal says that as soon as a child starts counting numbers, he should be introduced to money. “Parents should play an active role in providing them with information. For instance, teach what he can buy with a one rupee coin and to recognise the money, the symbols in the coin, etc. There are two ways that children learn — by observation and repetition.” Talking to children about your values on money — on how to save it, how to make it grow, and how to spend it — will have a lifelong impact on them.
“Children should be made to understand the difference between ‘needs’ and ‘wants’. This will enable them to make good spending decisions right from childhood,” says psychologist Dr Raghurami Reddy.
Setting goals is primary for learning the value of money. “If a parent has the habit of buying everything that his kid asks for, this will only spoil the kid. What I do at home is I set a goal for my daughter — give her a task and award her pocket money in denominations that she can count. And, she in turn puts it into her piggy bank.
Once the money grows, she is entitled to buy toys, chocolates, etc. I think this has made her responsible. These days, banks are providing savings accounts for kids and so parents could try that option,” says a parent, Suchitra Kumar.
Keeping good records of money is another skill that ought to be taught. “I have encouraged my children to maintain a book on their savings and spending. Kids should also be taught the concept of borrowings and interest to be paid on that amount,” says a parent, Deepthi Nair.
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