Teaching Kids About Money: Build Strong Financial Habits Early On!

Many of us still struggle to understand money and finances as adults. But imagine if we had learned these skills as kids—it would’ve been a game-changer! Today’s kids are incredibly sharp and curious; they just need guidance and a little practice to build strong financial habits early on.

Learning how to manage money is a bit like learning to drive: if you start young, you’ll be much more confident later. Introducing your kids to basic financial concepts at the right time ensures their journey toward financial independence is smoother and more rewarding.

Why Start at 7-8 Years Old?

This is the age when schools teach math basics like addition, subtraction, and multiplication. It’s also when kids start recognizing the power of money. For example, they know you can pay for toys with “plastic money” (credit cards) or through Paytm/Google Pay.

Pro tip for Parents: Avoid saying, “Abhi paisa nahi hai” or “Bahut mehenga hai” when your child asks for something. These phrases create a negative mindset about money.

Instead, try:

• “Let’s save for it and buy it on your birthday!”
• “Work hard for it, and you’ll get it soon.”

This way, your kids learn patience and understand the importance of effort in achieving goals.

The Power of Pocket Money

Giving your kids pocket money isn’t just fun for them—it’s an opportunity for them to learn! Let them buy their favourite chocolate, or allow them to place an order at McDonald’s. This teaches them how to handle money and the value of spending wisely.

Make Them Bank-Savvy

Opening a minor bank account for your child is a great way to introduce the concepts of saving and managing money. The thrill of having their own cheque book can be empowering!

Here’s where you can take it a step further:

• Teach them about deposits and withdrawals.
• Introduce them to investing by starting a SIP (Systematic Investment Plan) in their name.

This money could become seed capital for their future dreams:

• Your little chef could use it to open their first restaurant.
• Your aspiring designer might use it to launch their own boutique.
• Your young entrepreneur could invest it to build their startup.

Make Money Conversations Fun

Many parents avoid talking about money in front of their kids, but including them in these discussions is a fantastic teaching moment!

• Show them how you budget for groceries or household expenses.
• Let them help you prepare a monthly budget.
• Explain how bills are paid.

These small steps can demystify finances for your children and teach them essential life skills.

Teach Financial Priorities

1. Invest First: Teach them to secure their future before spending.
2. Save for What Matters: Help them understand the value of saving for meaningful goals.
3. Spend Smartly: Show them how to budget wisely and prioritize needs over wants.

By giving your kids the tools to manage money early, you’re setting them up for a lifetime of financial confidence. While the present might have its challenges, their future will be brighter and better with the right habits. Let them dream big and build a strong foundation to achieve those dreams!

I would like to add a very personal story here.

My son started saving since a very early age.

I used to give him a pocket money on a weekly basis when he would keep his room clean, pack his bag, arrange things in the house, refill empty bottles and keep them in fridge, etc.

With this he had good savings, every time when he went to his grandparents house. Whenever we leave their place as elders, they always gave him money. After sometime he stopped putting that money in his piggy bank and asked me to deposit in a bank account and invest it further.

After a few days he checked with me counted the money asked for some from the account and bought a bike for himself from his savings.

All these things, encouraged the habit of saving, investing a discipline of keeping the house clean being responsible and understanding what needs to be bought a sense of achievement that he can plan and take decisions by himself.

So, with investing we can learn many life lessons which help us live a better life.

Feel free to connect with me and share your story or concerns about finances.

Author Introduction

Harshada Singh is an accomplished entrepreneur and a Certified Financial Planner, dedicated to empowering individuals to make informed financial decisions. Her journey into the world of finance began in childhood when she was captivated by the power of money-making and money management. Fascinated by how financial decisions could shape lives, she pursued her passion, specializing in Banking and Finance, and securing a job at Citibank. However, due to her entrepreneurial spirit she start her own investment firm. With a passion for simplifying personal finance, Harshada has helped countless clients set and achieve specific, measurable, attainable, relevant, and time-bound (SMART) financial goals.In her free time, Harshada enjoys reading and traveling to new destinations, which often inspire her innovative financial strategies.

She can be reached at:

• Facebook: Harshada Mahamane Singh
• Instagram: @harshada.singh.cfp
• LinkedIn: Harshada Mahamane Singh CFP
• Website: https://www.wealthforyou.in/
• Email : harshada@wealthforyou.in

Business Introduction

Dignity Wealth For You/ Dignity Management Pvt Ltd offers comprehensive wealth management solutions to individuals, families, businesses and other entities.  We have had our expertise in this field for over a decade now. We provide tailored strategies to help clients achieve their financial goals, simplifying the complexities of investment decisions. Committed to long-term wealth creation, Dignity Wealth For You empowers individuals and families to build a secure and prosperous financial future.

Your comments and shares do more than just support our blog—they uplift the amazing moms who share their stories here. Please scroll down to the end of the page to leave your thoughts, and use the buttons just below this line to share. Your support makes a big difference!