We all know schools sadly lack teachers and curriculum to teach personal finance education or money management during their formative years. So the burden lies on us. The parents. Who have to give kids this life lesson of money management. You see, by giving them the school education, we are teaching them how to earn money. But earning money is only part of the equation. You have to teach them how to manage it, save it and watch it grow. In this, we will focus on specific takeaways you can follow to make your children money savvy.
If you are a parent, ask yourself these three questions:
- At what age did I get introduced to money
- do I know the real purpose of money at the age
- What if I knew the real value of money a little early
Kids will become money savvy if you start teaching them simple concepts and hands-on money management. These hands-on skills makes a huge difference in how they handle personal finances for the rest of their lives. Imparting real life financial skills to school students is critical because it prepares them to handle money effectively in real life. Whether it is the ability to operate a bank account early or understanding the importance of budgeting and investing for future goals, this program is critical to their overall development.
Here are 4 simple financial resources that can make you kids money savvy:
Resource #1: Open a Money Saving Account
Open a bank account for your children. you see, saving is a habit which can be beneficial at any age. Many banks offer savings account for kids keeping the parent as a guardian. For e.g. ICICI BANK has this Young Stars Savings Account. You can open and operate the account to plan your child’s need, right from a young age. By opening an account, you will get complimentary personal accident insurance protection and purchase protection cover on your Savings Account. Various banks offer various perks to lure the customers. So do not forget to shop around. Usually, with a kids saving account, you get an email or text alert whenever a transaction is made. You give them the independence to make purchases and manage their money, but maintain oversight so you know how they’re doing and can offer guidance.
Piggy banks are great, but the Young Stars Savings Account teaches children that saving using online financial tools is easy and fun. So to make your children money savvy, you start with a savings account for them.
Resource # 2: Provide them the financial literacy
Indian National Stock Exchange (NSE) under the guidance of the Advisory Committee for the Investor Protection and Education Fund (IPEF) of Securities Exchange Board of India (SEBI), created Financial Education For Children booklet. This resource includes several modules such as Financial Plan, Budgeting, Managing your money, Financing Assets, Protection of Assets, Investing Money, Retirement planning, Taxes and you and career planning.
SEBI has another resource called Pocket Money This is flagship programme aimed at increasing financial literacy among school students. The objective is to help school students understand the value of money and the importance of saving, investing and financial planning.
The Reserve Bank of India has undertaken a project titled “Project Financial Literacy“. The Objective of the project is to disseminate information regarding the central bank and general banking concepts to various target groups, including, school and college going children, women, rural and urban poor, defense personnel and senior citizens.
The project has been designed to be implemented in two modules, one module familiarizes users with the role and functions of the Reserve Bank of India; and through the other module, users are introduced to banking concepts.
All the reading resources mentioned above can help you make your children money savvy.
Resource # 3: Make them understand the goal of retiring rich
It is never too early to introduce the idea of retirement to your children. Children should be thought the advantage of starting savings early in their life and the effect of compound interest. Introduction to Retirement Planning for School Students, written by Pension Fund Regulatory & Development Authority of India will provide required basics for the children to become savvy about retirement planning. This resource explains about retirement, retirement planning and pension.
Resource # 4: Teach them the importance of safety net
Insurance not only provides peace of mind to you and your loved ones but can be an essential part of a sound financial plan. As you grow and move through life you could appreciate the many benefits. In general, concepts of Insurance too tough to grasp and are hard to know how they will be useful for us. Insurance Regulatory and Development Authority Of India developed a series of comics that will help you get familiar with them easily and in a fun way!
IRDA made this available as comic strips and as videos. It explains about basics of insurance, Insurance Ombudsman, motor and health insurance, etc. Most importantly, the resources are available in most of the Indian languages.
To conclude, I would like to provide a resource for the parents to become financially savvy. Financial Education Programme for Adults (FEPA) is a program initiated by National Center for Fiancial Education in 2019. FEPA is a Financial Literacy Programme for creating financial awareness to the adult population of India. To create financial awareness which will generate a confidence in the financially excluded sections of the society to use the financial services and products more effectively thereby bringing more people to the formal financial sector. If you are a parent, this resource can definetely help you and provide you tools to upbring your children a money savvy ones.