A home or a family is the first and the most important part of a child’s life. This is why we think it’s safe to say that home should also the first place where a child learns about the value of money, and by extension the value of saving.
Here are four ways which are not only a little diverted from the conventional way to educate the child but also more convenient and focuses more on the overall development by instilling a useful habit right from the younger age.
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Interaction is the key!
Your kids wouldn’t understand the value of money if you do all their spending for them. Sure the concept of pocket money has been around for a long time, but kids only see it as money they can use for stuff they want to buy.
Have them interact with the day to day spending of the house, like groceries, bills, and they’ll definitely know that money is used for more important stuff than candies & toys.
Money = Work
It’s quite a fact that there is no money without work. Children don’t necessarily get money without working for it, unless it’s their birthday. But to learn an important lesson, they should. Assign chores to them, like cleaning the table after dinner, making their bed in the morning, etc. And they get extra money for extra work like, cleaning the windows, cleaning lawns, etc.
Reward them monetarily for the work they do!
Time over Money (Power of Compounding)
Teach them the power of compounding! Small savings when compounded over time can give great returns. Perform an exercise with them where you give them a small amount (say Re 1), and everyday that they don’t spend it, they’ll get double the next day.
A Chance to be creative with your kids
You should encourage your children to spend, save & give the money that they get. The easiest way to do this is to encourage them to divide the money they earn in three buckets; Spend, Save & Give.
Leave it up to them to decide on how they want to divide what they earn between the save & spend buckets, but make a condition that the ‘Give’ bucket gets at least 5% of their earning!
It’ll take time for them to get over the desire for instant gratification, and most of their ‘spend’ bucket will be spent.
But with your guidance, they’ll learn to use the ‘save’ bucket for building up their savings for bigger goals that can only be achieved with larger savings.
The ‘Give’ bucket is also a great concept for teaching them about the concept of taxes.
Homeschooling your children about money is a good, maybe even better option than the regular way of teaching! It is also a good way to help them save money.
Now, after teaching your kids, it’s time to do some learning yourself! With Sqrrl’s BYOD feature you can invest in the future of your child by instilling the habit of saving in yourself as well. Sqrrl is one of India’s simplest money saving & investment app, and one that will definitely not let you down.
Our app is amazing. You HAVE to check it out, go use this link!
Also, what are you going to do now that you’re slightly more aware of the world’s finance news? Well, you’ve got to subscribe to our email so you keep getting smarter!
Aditi Asked us:
Education costs keep on rising, how can I ensure the security of my child’s future education?
So we told her:
The only answer to this question is to start saving for their future as early as possible. Even if you start putting aside Rs 5,000 a month, it’ll be a head start towards securing the future of your kids. Rather than going for kid funds, it’ll be much more sensible to go for a goal based investment in mutual funds. Which ensures that your goals and interests are taken in mind to reach your target goal. A lot of our customers are using our BYOD (Bring your Own Dream) feature to save for their kids’ future education. The best day to start saving for your child’s future is today! Use this link to download our app and setup a goal for your kid’s future.