Are your money habits confusing your kids? Parenting tips to teach children about earning, saving and spending
money habits and attitudes will have a longer and stronger impact on them, and are likely to last a lifetime. Here are some things that you should be mindful about when it comes to money.
Saving dichotomy: If you keep insisting on the virtues of saving before spending, but go on a spending spree the moment you get your salary, your child will not know what to believe.
While you don’t have to disclose to them how much salary you get, make sure you let them know the difference between essential and discretionary spends in the way you manage your spends. Show them that the first thing you do on getting salary is pay your utility bills, domestic workers’ salaries, buy groceries and pay insurance premiums.
Better still, involve them in the process by letting them make these payments, whether it’s offline or online. Explain the process of automation for investing in mutual funds, recurring bank accounts or NPS, and show how money is deducted from your account at the start of every month.
If you then tell them that they must save a small amount from their monthly allowance, it will carry more weight.
Impulsive buying: This is an act that many parents are guilty of, but as long as they are doing it once in a while and not as a habit, it should be fine. For instance, if you tell your children that you can’t spend much in a particular month because of impending house renovations or car repairs, but then go ahead and buy an expensive dress for yourself while grocery shopping in a mall, the child will be confused.
His most likely takeaway will be to spend at will irrespective of the impending essential spends. This is the easiest way to scuttle your household budget and adversely affect your savings and goal investing.
