Parents want their children to lead a comfortable life but don't know where to draw the line between necessities and luxuries. Here's how you can strike the right balance and teach your children money management from an early age:
"All my friends have mobile phones," said 11-year old Priyanka. "Well, your friends are immature. Don't they realize that at this age it's just an expensive toy with no real use?" asked her aunt. Priyanka quickly came to her friends' defense, "But aunty, it's their parents who are immature to buy them such a costly thing.'
Call them immature or hapless but the truth is parents today are giving in to their children's demands more easily than ever before. They want their kids to have everything - designer clothes, shoes, accessories, gizmos and all the things they never enjoyed themselves. In the process, parents are not only eroding their own savings but also raising children who have no value for money.
Here's how you can strike the right balance and teach your children money management from an early age:
Tackle pester power
Whining, screaming kids, pestering their parents to buy them things from their unending wish list is a common sight in malls. Pester power is one thing that can break all your resolve to teach your little one that money matters. So, your first step should be tackling this problem. Stem nagging before it begins. Talk to your child before you take her shopping. Explain your budget and how much she can spend in the shop. Once she decides on her treat of the day, help her find cheaper and better alternatives from the store.
Explain the hard work concept
"What will you do when you grow up?" asked a guest visiting Rahul's house. "Nothing," he answered jokingly. "But then how will you get money to take care of your parents when you grow up?" the guest persisted. Rahul thought for a while and said, "I will get it from the bank."
Well, that's what most children think: Money comes from the bank or the ATM printing machine. So to teach your child the value of money you have to burst these childhood myths.
Tell him that you have to work in order to make money. Start by things like, "We should not waste money because dad really works hard to earn it." A piggy bank will show your child how a bank works. You can ask her to do some mock jobs and you can give her coins in return. She can put these in her piggy bank and watch it grow.
Count your money
Introduce your child to coins and notes of different denominations: 25 paisa, 50 paisa, five rupee, ten rupee, etc. This way he will realize that Rs. 100 is not just money but a lot of money because it takes ten notes to make one hundred rupee note.
Give pocket money
Giving your child pocket money will not only put an end to incessant demands but also teach him to be more responsible. Very small children can be given minimal amounts that can be increased as they grow older. Give small denominations. Instead of Rs 50 give your son 10 five rupee coins so he can save one coin for the next month. When he wants something he cannot afford ask him to save to buy it. The next time he will think twice before he blows his allowance to buy another toy.
Watch what you spend
All the above ideas might fail in their purpose if your spending behavior contradicts them. Your daughter will not understand why her mother buys a new lipstick when she already has so many. If you take your son along for grocery shopping, stick to your list. You have to reign in your impulses during such shopping trips.