Kids, Finances, and Money – Part 2
Posted on: August 30, 2019.

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Many parents wait until their children get their first job before they take them to a bank and open an account for them. Encouraging them to use the bank services teaches them to put money aside and also learn about the perks of using a bank. Money that earns interest will be an incentive for them to put further money aside. They can start saving from today, for tomorrow, when they would enter college. They’d feel thankful.

The best way kids get used to talking about finances is if they see their parents doing it. Of course, there’s no need to elaborate the nitty gritty money crunches, especially if finances are tight. But when the child sees his/her parents aren’t afraid to talk money, it helps normalize these things in their minds. They’ll be more transparent and communicative about their own finances, especially if they need our advice in money matters in the future.

Kids should also know how credit cards work. We wouldn’t want our kids to operate on credit card facility before they actually understand how it works. But unfortunately, many young folks do run into trouble when they get their first card and don’t realize how high interest can be if they don’t pay back what they owe, immediately.

Whenever you use your credit card to pay for something—particularly if you’re buying something for your child—use it as a learning opportunity to explain a bit about how credit cards works. They need to know, right from a young age, that a credit card doesn’t translate to free or endless money. Not only do credit cards have a limit, but they also come with a price if you’re not able to pay your outstanding credit dues on time.

Finally, the best way is to lead by example. We can give our children all tips and tricks for financial success that we can think of, but if we don’t live by our own words, then our children will have a hard time taking it to heart.

Children learn by example, i.e., meaning they look up to their parents’ behavior in order to model their own. If they see us constantly going for instant/impulse buys, they’ll think that such behavior is okay. But, if they grow up seeing their parents cautious about spending their rupees, this will quite likely translate over when they reach adulthood.

The bottom-line: we should always ‘Walk The Talk’!

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