For the 13th part of our 14-day series, experts share tips on how to introduce money saving techniques to children.
With Covid-19-triggered mayhem, families have had to make drastic changes to their budgets as pay cuts and job losses became the new normal. In this Pandemic-proof Budgeting series of the KTForGood campaign, we aim to help you make informed financial decisions amid the challenges arising from the pandemic. For the 13th part of our 14-day series, experts share tips on how to introduce money saving techniques to children
Educating children on money management at an early age can equip them with a crucial life skill to make intelligent choices, experts have said.
Marilyn Pinto, founder of Kids Finance Initiative, said: "As soon as they say, 'I want' would be a good time to talk about how money works. Kids usually form their concepts about money at the age of between five and seven and parents can start talking to them from that age. Mostly parents don't talk about money to children as they feel they are not experts but that's not the correct approach. Every parent is a mountain of value and just talking to their kids about what money mistakes they had made or on what basis they made a certain financial decision can give their children a good insight on how money works."
Pinto, who runs financial education programmes for children in the age group 9-19 years, added that financial literacy is a critical to-know skill and can prove to be a life-saver.
"If you look around, you will see that not many can manage money well and often their lives are derailed due to poor savings and bad money management. It is important to give children a proper financial education from a young age and then give them freedom to spend their own allowance as this is how they will learn how to make crucial decisions. Don't be strict about how they spend it because they will make mistakes and learn from them. And once they understand how money works, they will feel a lot more empowered and in control. In fact, don't lecture them because kids switch off when we get into lecture mode. Instead, use stories to illustrate a point," Pinto added.
Alexey Nuzhnyy, master trainer of finance at UV Consultants Dubai, said: "It's a good practice to provide children with some reasonable regular allowance and maybe, advise them on how to spend money smartly. But don't be too pushy, let them make mistakes and learn from it. Children must also be made to understand the importance of saving and that if they don't save they can't buy something expensive."
Nuzhnyy added that parents should teach kids that possessions don't make for a rich life but it's the experiences that is the true wealth.
Vamsee Krishna, CEO of Yskool that provides entrepreneurship and financial literacy programmes for school students, said: "For many parents, financial literacy is as important as language literacy. At online courses conducted at yskool.com, we are focusing on building new age skills which will help kids become successful in their life. As part of these online camps, our junior MBA programme, where kids are thought by serial entrepreneurs to develop their idea to business plan and pitch their plan to Investors, has received an overwhelming response."
Dubai resident Nausheen Shamsher, who has an 11-year-old daughter, said she and her husband have been actively teaching their daughter the importance of understanding value of money and the hard work that goes in to earn it.
"We have ensured that our daughter has the right knowledge to spend and use money on things which are worthwhile. To facilitate this, I reward her for household chores such as helping with the laundry, dishes, grocery shopping, etc so that she understands and knows that you have to work hard in order to earn money. We offer gifts in cash to inculcate the habit of saving and helping her utilise the same on an "essential" purchase she wants to make."
She has also introduced the concept of analysing and judging between items of different brands and choosing or opting for the one that offers quality and value for money.