According to the traditional school of thought, children will develop financial literacy as they
become adults. However, the modern school of thought says that parents should encourage
developing financial literacy in their children at a young age.
Financial literacy is an integral part of holistic education for children. It is a life skill. It helps
children understand the concepts of money management from early on and grow up to be
money wise.
Here are some ways to inculcate financial literacy habits in your children:
Give Them Pocket Money
Pocket money and piggy banks are great ways to teach your child about money from as
young as 8-9 years of age. Pocket money gives them a sense of financial freedom and they
learn what happens when they learn to save instead of spending it. You can know more
about the why and how of pocket money here.
Let Them Earn Through Gigs
If your child is old enough to run some errands inside or outside the home, you can consider
paying them some allowance for doing the same. They can even do errands for their
neighbours. This activity shows them how money is earned and how much effort it takes to
bring the income to run the house. However, make sure that your children don’t get used to
doing work only to earn money.
Involve Them in Financial Planning
Every family has a budget, and a list of income, expenses and investments. The next time
you sit for financial planning, ask your kids to join you. Let them know how you plan the
budget for each month, save money and make useful investments to grow income. This will
give them an idea about the financial planning it takes to manage money resourcefully.
Buy Them Books and Games
These days, there are umpteen books and games available on money and money
management across different subjects. These books are easily available on Amazon, Flipkart
and other e-commerce stores. You can buy age-appropriate books or games for your
children and help them take their first steps towards financial literacy.
Open a Bank Account
You can easily open a minor savings account or kids account in a bank for your teens. These
accounts give a cheque book and a debit/ATM card. Your children can learn how to operate
a bank account, use a card and write a cheque.
Take Them Shopping
Most often you take children along for shopping but you rarely involve them in buying and
payment process. Show them why you should see the price tags, how to make the payment
at the counter, and how to avail any discounts or coupon offers.
Enrol Them in Workshops
In our days, there were no resources to learn money management. But, today, there is no
dearth of such resources. One such resource is workshops on financial literacy. These
workshops teach about the concepts of money and financial planning in a kid-friendly
manner. Enrol your child in these workshops.
Financial literacy is a stepping stone to forming good money habits in children. Let them
start young.
