7 Easy Ways to Teach your Child Money Discipline
Instilling sound financial sense in your child is a necessity in today’s world. It is the only way to ensure that they learn to make prudent financial decisions, and lead a disciplined and rewarding life. However, teaching children about the importance and value of money can be difficult. Here are some simple tips on how you can ready your child for a financially-secure future.
7 Ways to Make your Child Money-conscious:
1. Offer a Fixed Amount of Monthly Pocket Money
Managing personal finances, regardless of how limited they are, is a very powerful tool to learn the value of money. Giving your children pocket money helps them learn how to handle money, keep track of their expenses, learn the importance of steady income, and prioritize their needs.
2. Bargain and Research in Front of Them
Teach your children the importance of comparing prices and quality before making purchases. Talk about the various offers with vendors, or browse different online sellers before finalizing your product. This will teach them the value of a disciplined buying process.
3. Ask for Their Inputs When Making Household Decisions
You children must be able to weigh all options before making a financial decision regarding household responsibilities. Teach them this with a simple trip to a grocery store. Make a list of supplies you need for home, and have them select the right products. Make them count and provide the right amount of money to the cashier. This can help them understand what it means to run a household and prepare them better for the future.
4. Teach them the Importance of Savings
Savings are important in all phases of life. The sooner your children learn to save, the better their future can be. If they want something, for example a toy, ask them to save the money from their allowance, and buy it themselves. This will teach them patience and financial discipline.
5. Make them Understand the Difference Between Needs and Wants
Children should know how to differentiate between a necessity and a luxury. This may be a tough life lesson to learn, but the one everyone should be aware of. If your children understand this early, it could prevent them from making big mistakes in the future.
6. Offer them Some Kind of Reward System
Feeling like you earned something is much more satisfying that simply getting everything you want. Offer your children fun incentives to do their work—like cooking on their own on weekends to get extra TV time—and help them realize that this is how the outside world works.
7. Strive to Become Good Role Models
Children try to copy their elders. Unless you take an active interest in your own financial management, they will never understand the true importance of money discipline. Today, you can choose among various investment options—like public provident fund, mutual fund, direct equity or share purchase, real Estate, investing in gold, and fixed deposits—to create a balanced and profitable portfolio. Carry out your research thoroughly, and make a well-informed decision that you can proudly explain to your children in the future.
Teaching your child money discipline is easy if you practice it yourself. Rather than making financial management feel complicated and time-consuming, teach your children how to be goal-oriented and plan finances to meet these goals. Ensure that they learn the importance of investing early, and show them by your example.