Knocking Some (Financial) Sense Into Your Kids

You are in a posh toy boutique, in the middle of the mall. Your kid will not stop screaming murder because you refused to buy him that remote controlled toy car. You actually don’t have any money, other than for groceries for the week. But no matter how much you explain to your kid, he does not seem to be getting it. He simply wants the toy. And he wants it now. If you too have experienced such an event, you are not alone. Many parents all over the world experience the same situation where their kids are not financially aware. Such situations can be difficult as well as embarrassing. Here are some tips to avoid such situations from recurring with your kids.
Start Early
It is never too early to make children aware about money and its implications. This does not mean that you have to give them a lecture about investment banks and portfolios the minute they start talking. But, talking about money should not be avoided until your kids are ready to go off to college.
The Concept of Saving
Teach your children about saving money from an early age. Piggy banks are your friend in this situation. Buy one for your kid and encourage him to put money into it. At the end of the first month, open the account and let him do something fun with the savings. The second time, keep it for two months and gradually start increasing the time period from thereon. As he starts saving more and more, teach him about banking. Many investment banks have children’s accounts. Open one such account for your kid and let him deposit his money in the account. This ‘grown up’ act will surely give your kid a morale boost!
Give Your Kid an Allowance
Research has shown that kids who were given an allowance are better at managing their own money as adults than kids who depended on their parents for all their needs. So give your child an allowance early on. Make sure that what you give is appropriate for his age. Assign chores and errands for him and let him earn his allowance. Similarly, if he does well, he will be rewarded. Out of the allowance, let your kid pay for his school lunch, movies, night out with friends or birthday presents.
Be Open
Many parents have the habit of shielding their kids from their financial situation. While you need not come down upon your kids like a ton of bricks about your financial difficulties, you can give them a filtered version. This way, they will be less prone to a situation as described before.

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