Personal Finance Awareness

Should children be taught about saving? How to ease the learning?

saving

Money Saved is Money Earned. Here is how you can develop personal finance and saving habits in your children. We will be drawing your attention to the importance of financial education among them.

Various subjects are taught in school to children, since the tot days to strengthen their skills and knowledge for a happy future. But when it comes to financial education, we as parents are a little ignorant, thinking it is too early for a kid. And this perspective has been financially disrupting the crucial period of our children.

Why personal finance and saving?

To encompass the ability to evaluate real-life financial situations with ease and understanding, teach the children financial concepts. Include money management, financial planning, and prioritizing wants.

Here is why our teaching pattern needs an upgrade.

India ranks lowest in financial literacy among all the BRICS countries in 2021. The financial- literacy rate of India is 27 per cent. Children are the future of a nation, and to build their financially aware future, we must emphasize developing their financial ability. Other countries are already involved in future building. 22nd April is dedicated to Teach your Child to Save Day in America. The finance professionals in the USA visit the kindergarten and high schools on this day to educate children about earning, saving, spending and investing. America ranks 14th in the children financial literacy rate.

Why raise children with financial values?

Making children financially informed will allow them to make unclouded financial choices. A financially educated child will capably take firm financial decisions regarding saving, investing, borrowing, and more. At the same time, a lack of financial knowledge will bring drawbacks in this progressive and financially complex era. The vision of the National Strategy of Financial Education (NSFE) 2020-2025 is A financially aware and empowered India. The initiative of empowering the future of India is possible by taking financial awareness as a life skill. If for the future of child numbers and alphabets can be the part of life since tot days, include financial learning as well for future building.

How to engage your kids in developing financial values?

It is high time to break the stereotype about the inclusion of financial knowledge in life. Here is how you can make your children financially aware:

Lifestyle changes

By giving them an understanding of money, you can teach them about prioritizing their wants. Kids are volatile and to teach them the technique of prioritizing is to make them understand how they can excel in their area of interest. For example, if they are interested in ‘Ironman’, make them understand how Tony Stark used his fund piece by piece for ‘Avengers Initiative.' The way he uses the money earned from “Stark Industries” for the 360-degree growth of every avenger. Or, if they are interested in ‘Cinderella,’ how can they ‘help her build her estate.’ Or how they can use the available resources to build themself. Their superheroes should inspire them in all ways.

Play and Learn

Learning should always be fun. Create opportunities and chances for your children to make them understand the value and purchasing power of money. Many schools involve games like 'Monopoly' and 'The Game of life' in their timetable to make the students understand finances well and develop financial value. Parents can start planning such little activities and games for their children from a young age. This way child will be encouraged to use the money systematically.

Make them the In-charge

Start giving your children the authority. Initially include them in understanding their expenses. How to make the weekly lists, plan the budget, and organize the weekly requirements with the available funds. Take a case if children ask for money in need of stationaries for a week. Parents generally would bring the stationaries to them. But, to make them understand the purchasing power, you could better take them to the market, provide them with money and guide them to get their stationaries and things. For, they used the provided money effectively, hurrah! Else guide them about how they can maintain their requirements list and check it. This practice will bring a sense of responsibility to your kid. Children always enjoy improving themselves. When they achieve something, they become more confident. This practice will develop credit discipline in your children from a young age.

Train and educate them

The National Centre of Financial Education (NCFE) runs a flagship program in the schools of India. Any school can openly enroll itself for the Financial Education Training Program (FETP) by NCFE. Even teachers on behalf of the schools can attend the training. The qualifying teachers and schools get certified by NCFE as Money Smart.

To provide advanced financial training and NCFE has been initiating such programs in collaboration with CBSE as well.

For collaboration or detailed information, you may visit their website.

National Stock Exchange (NSE) Academy has come along with Maharashtra Knowledge Corporation Ltd. to provide personal financial management programs in India. This course covers learning about income, taxation, expenditure, savings & investment avenues, borrowing, managing risk, budgeting etc.

The program is currently available at the MKCL authorized learning centres. For more information, you can visit the official website- nseindia.com

Real-Life scenarios learning

About the real market scenarios. What is profit and loss, what is risk and how to manage it, what are stocks, assets, and a few basics of investing? Promote saving and investing behaviours in them. Make them aware of the provisions available for financial growth. Educate them how their early savings and investments can equip them for their dream life. Like evaluation methods, insurance plans, pension products, compounding investments, and trading knowledge.

Concluding, we collectively need to contribute to the growth of our children. No one can deny the fact that money is the most valuable material. We as parents need to take the responsibility of adding knowledge to our kids learning. Start giving them adequate financial exposure from a young age. Has this article encouraged you in teaching your kids financial techniques or, how can we add on to the financial wellness of the future? Raise your thoughts and queries below.

For more information, you can visit FinTech Blog.

Till then, happy investing!