Money management tips: Make your children wise about wealth
Money management tips: Instilling knowledge about money, how it is made, saved and spent, in children is or critical importance. It helps in giving them financial independence and maintain discipline.
Money management tips: Being parents, it's your job to invest for kids, but it's also your job to impart money management lessons in your children so that they become mature and rich adults. Instilling financial independence and discipline, making them financially literate and helping them learn from their mistakes are some of the investment lessons, which are expected to be imparted by the parents while raising children.
Speaking on how one can make one's children financially literate, Rahul Jain, Head — Personal Wealth Advisory at Edelweiss said, "One of the toughest challenges faced by parents is, to prepare their children financially for the future. Investment is a habit that is cultivated over time and you need to maneuver your kids to save and invest more. Some may argue the need to put in the additional effort when everything is available online. While the web provides abundant learning materials to get started, children learn the tricks by observing their parents. Hence, we look at some of the important aspects, parents need to cultivate to ensure that their kids become good investors."
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Asked about the top money management virtues that parents need to impart in their children Rahul Jain listed out the following financial lessons that can make one's child a rich adult:
1] Instill Financial Independence & Discipline: It is very important for kids to understand that there isn’t an unlimited flow of money; therefore, they need to think before they spend. Instill a sense of discipline in them when it comes to their allowances. This can be done by spreading their allowance over the month – which teaches them how to categorize their expenditure appropriately. Simultaneously, it is important that they understand how to create an emergency fund – for them to use it when they need the money!
2] Teach them to be - Financially Literate: A lot of adults are often intimidated with the thought of teaching kids about money. Some argue, it can spoil them and some are scared they will be irresponsible with it. But it has been found that once kids know proper money management skills, they tend to keep them and use them throughout their lives. Hence, focus on teaching them the basics of investing – right from how to open and operate a bank account to how to budget and keep a record of their transactions. Early financial literacy will teach kids how to have a good relationship with money, an invaluable lifelong skill that won’t ever be forgotten.
3] Learning from the mistakes: When the kids first start managing money, they are bound to make some mistakes or a wrong choice in investment. However, what’s essential is to learn from them and ensure you don’t repeat them. Also, instead, of regretting, you must analyse what went wrong and make sure it doesn’t happen in the future. Seeking key lessons will help you to learn how to invest and grow their money judiciously.
Hence, keeping the above-mentioned lessons in mid and imparting them in one's children may help parents to ensure that their kids grow into responsible and rich adults.
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