New Delhi Children learn life skills mainly from their parents, teachers and friends. Since schools and colleges do not teach management of personal finances on a practical level, nor are friends in a position to learn from each other, the responsibility of informing children about finances falls on the parents.
what should you discuss
It will help your kids if you talk with them about savings, budgeting and many other financial tools. In addition, giving them a small amount to protect and manage will help develop the habit and learn the nuances.
Nishith Baldevdas, Founder, Shree Financial, SEBI-registered investment advisory, Chennai, said that if we start teaching money management skills at an early age, financial failures are much less frequent. Also, if we start involving kids in our day-to-day financial interactions (especially during budgeting and spending), they start learning about it better. This exercise helps them to prioritize their needs and allows them to understand the difference between a ‘need’ and a ‘want’. Also, they feel more accountable and responsible in dealing with money.
Baldevdas said, “The biggest advantage of this practice would be that money does not grow on trees and nothing in life comes for free. To grow, we need to manage it properly.”
when should you discuss
Vikas Singhania, CEO, TradeSmart said that it is important for the child to know about the current scenario to help improve the situation. Parents will be pleasantly surprised at how quickly kids pick up on these points. In the present uncertain scenario, it becomes essential that children learn about their finances and money management. Singhania said, “Talking at the dinner table and going out with the family is a good opportunity to talk about the nuances of finance and real estate.”
Why discuss property with children?
You may have to transfer your wealth to your children in a few decades. It is best to teach them how to handle it at an early age.
Parents can introduce children to their financial advisor, who will teach them the value of money.
Discussing finances and assets with children ensures that your money reaches your children when they are adults.
“Talking to your kids about money can make them less fearful and more efficient at managing money. This could be an early leap towards financial security and independence,” said Prateek Mehta, co-founder and chief business officer of Scripbox. “Also, when it is time for them to make major life decisions – a car, a Wealth or education- they will be well prepared to manage their expenses, debts and savings.”
Mehta said, “Understanding money and its value at an early age will help them into adulthood. It will also make it easier for them to seek professional financial help, which they may need along the way.”
Archit Gupta, Founder and CEO, Clear, said, “You should discuss finance and property with your kids to teach them the value of money. It sows the seeds of financial literacy at an early age and helps your kids learn about it. Encourages to learn more. Manage money. Also, holding money is as important as creating wealth. Teaching your kids the value of money at an early age ensures that your money is in good hands.”
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