School teach many things to students but most do not teach the value of money to them. How parents can teach their child the value of money? Here are some simple tips:-
- First of all, parents should make their child the importance of 'saving money'. This will go a long way in their financial learning and will also stay with them during adult life.
It has been found that many financial problems in later life are due to ignorance towards financial planning. - If children want to buy something which is expensive, parents should encourage them by contributing equally. Also make them understand the worth of the things they buy in monetary terms.
Instead of buying everything for children, parents should give them pocket money and allow them to buy the things they wish. However, parents should follow-up them to know on what things they spent the money. - One of the best ways is to explain the children about the value of money is to explain about banking transactions which can be started by opening a bank account for them. As the children start learning about simple & compounding interest at school, parents can introduce them about FDs, Post Office Savings Account etc. Their academic knowledge can be included in to day-to-day money management activity.
- While investing, many do not bother about the importance of inflation-adjusted returns. It is important to teach the children how inflation works and what it can do to their savings.
- The method of teaching about the value of money depends upon children's age. When children transact with cash, they know the value of money and how it works.
- Parents should not force or compel the children to read Economic & Financial Times to know about the finance. Instead, by using simple language,they can explain the concept in game form. Children will definitely need more time to understand.
- Above all, parents should have patience as it will not happen in a day.