Financial independence and financial planning are the keys to a better life today. As our cost of living increases, effective planning with savings is important to keep us resilient against future expenditure. It is necessary to pass on the information regarding the importance of budgeting and saving to your children so that they may not struggle to manage their finances later in their lives.
This can be done by providing basic knowledge about money management at an early stage. For example, doing small things at home such as communicating with the kids regarding simple money topics at home, finding out the opportunities in daily activities to turn routine money transactions into teachable moments.
One can also take them to the bank to explain its role in keeping the money safe. From here, they can adopt the habit of saving or depositing in his or her piggy bank.
You can also involve your child in discussions related to the monthly budget, by explaining to them what is necessary for living and what is not if you do not have enough to buy everything.
Budget planning is not only about the present, it will also help them to save money to secure the future. Your children can use this knowledge to save for their weekly or monthly expenses from their pocket money.
Besides these, you can gradually introduce them to concepts like investment, bonds, shares for better returns, in a short period with a low-risk factor.
Having knowledge about savings and investments at a young age will play a crucial role in lifelong money management. Apart from the saving, investment and returns children must be aware of the fact that good work always deserves recognition and reward. You can ask your children to complete any task in a given period and if he/she is successful in doing so, award him/her with gifts or games.
Learning on financial planning and having knowledge about various nuances on the money matter shall ultimately encourage children to manage the resources with optimum levels to gain the most benefits.
The author is Founder & Chairman, HostBooks Ltd.
DISCLAIMER: Views expressed are the author's own, and Outlook Money does not necessarily subscribe to them. Outlook Money shall not be responsible for any damage caused to any person/organisation directly or indirectly.