‘Making your children money wise’

It’s always great to see young kids embrace teenage, but with teenage comes great challenges.

Teenage brings about a transition where kids are encouraged to move away from a carefree existence to a partially responsible one. This is also a great time to inculcate better values and habits in your children.

With the advent of social media and better standard of living, teenagers want to have it all.

There is a remarkable increase in their needs, from wanting to buy fancy gadgets to shopping online and eating out with friends. This is the era, when they have a constant list of ‘things to do and things to buy’ at any given point in time.  Sometimes it gets really hard to make them realize the value of money and what it takes to earn it.

We, as parents, can always say, ‘NO’ when our kids ask us to buy something that is either out of budget or isn’t needed right away. But, is that the best solution?

Here are some tried and tested ways through which you can encourage your kid to become more money smart:

1. Help them segregate WANT VS NEED

Kids are impulsive. The moment you give them some pocket money to roll out with, they will spend it on some games or food right away. They do not have a tendency to think before spending. So, it is always a good habit of letting them know that money spent is money gone forever. It isn’t going to come back. Once they have an understanding of their money being limited, they will eventually spend it on necessity over desire. Also, reminding them that what they want isn’t always what they need will enable them to make better decisions.

1. Make Them Earn It

While you give them pocket money without any conditions on most of the days, once in a while get them in the habit of earning an extra buck with their efforts.

As a parent, you can always ask your child to do some chores and earn some money as reward. This makes them understand the relationship between hard work and money. Once they realize that the money they get is hard earned, they will eventually save it for something that they need rather than spending it sloppily.

1. Inculcate a habit to save

What piggy bank, saving jars teach them at young age is that savings is good. It buys you your favorite candy every week. Likewise, as kids grow old, their needs and dreams grow too. It is not the candy anymore but a trip to their favorite destination. Bigger dreams will obviously cost a lot more than a candy. Help them understand how bigger purchases require either require more time or more savings (earnings). Have good money conversations with them and involve them in small financial decisions. This will enable them grow into smarter adults who can manage their wealth much better.

1. Teach them budgeting

Teenage wants are, almost, always impulsive.  The moment you give them some pocket money for the entire week, they end up spending it the same day on a party with friends or watching movies. Once the money is spent, they would definitely come asking for more. It is better to hold the money supply and helping them understand the value of budgeting.  Teaching them to budget their expenses is the basic money skill everyone needs to master.

You can make them take charge and take small money decisions to get a reality check. For e.g., you can take them grocery shopping and make them decide how they would buy the listed items within the fixed budget. It is always great to let your kids make mistakes when they are young and when the money at stake is less. Failure, no matter how big or small, is the best teacher.

1. Use smart money management apps

Talking about GEN-Z, we are in a digital age where kids as young as 2 years’ old know how to use a smartphone. They are seldom seen off their phones and parents can make a good use of it.

There are some relevant apps which can help your child manage pocket money better. Slonkit is one such solution where there is a pre-paid VISA card integrated with a mobile app. There is a different version of app for the parent and the child. Parents can load money and track expenses while their kids shop, eat and have fun without risking overspending or worrying about spending on bad influence.

While the generations are moving from Gen X to Millennials to Gen Z, one of the things which is constant is the ‘parent-child bond’. With changing times and so much exposure at a young age, it is becoming more important than ever to inculcate the right values and money management in your children. It is very crucial to induce smart money management at an early age so that reality doesn’t hit them later. With some conscious efforts and meaningful conversations, Parents can definitely hope for a more responsible and happier adulthood for their children.