Children's Day Special: How parents teach their children financial concepts via board games and bank accounts

 Children's Day Special: How parents teach their children financial concepts via board games and bank accounts

Financial planners strongly believe that financial literacy should be instilled in children from an early age, as this will help them become much more responsible with money as adults.

Kavita Marwah, 40, of New Delhi, is a proponent of the saying "catch them young." While most parents want their kids to begin science, math, and language classes as soon as possible, she has chosen to teach her son Mohik even financial concepts from a young age.

The eleven-year-old has had a savings account since he was six years old. Mohit's parents created a bank account for him five years ago and stressed the need of keeping one up to date. He consistently saves a portion of his pocket money and transfers it into the savings account, according to Marwah. He has learned about interest rates, compound interest, and other things from us.

Similarly, 35-year-old Kamal Malhotra, a resident of New Delhi, has made the decision to impart financial literacy to his 6-year-old son Manan Malhotra. Malhotra said, "He now realizes the significance of depositing monetary gifts which he gets from relatives through his bank account."

Financial advisers strongly support teaching these skills to children from an early age. Plan Ahead Wealth Advisors founder and CEO Vishal Dhawan said, "The earlier you introduce kids to the concepts of spending, saving, and budget earning interest on savings, etc., the greater the likelihood it is that they will be much more responsible with money as they emerge into adults."

Six-year-old Kamal Malhotra formed a bank account, into which his son has begun to deposit money received from family on special occasions.

Even while there is still a long way to go until financial literacy is taught in Indian schools, there are certain things parents can do to help.

Spending and budgeting

Budgeting is very important to Hrishikesh's mother, Bhuvanaa Shreeram, who is fifteen years old and the co-founder as well as head of financial planning at House of Alpha. "He has a tiny notepad where he regularly records his spending. He has also mastered the art of budgeting and planned large purchases ahead of time, the source adds.

Qusai Kagalwala, 12, and Burhanuddin Kagalwala, 8, are Tasneem Kagalwala's two boys. Tasneem, 37, of Mumbai has imparted to them the value of planning and spending. Kagalwala distributes pocket money to each of them. "They have a month to utilize it before it expires. They set aside money for savings and create a budget. They are progressively learning to save this way, according to her.

"When it comes to any kind of spending, teach your kids to delay gratification," said Prableen Bajpai, founder of FinFix Research along with Analytics. She continues by saying that it may help them become more responsible individuals in addition to teaching children the value of money. They won't develop negative behaviors like impulsive buying thanks to it.

Before the kids go shopping, Kagalwala gives them a budget so they may plan their purchases and stay within it. The children consider product prices before making a purchase. They won't purchase anything if they think it's too expensive, she adds.

At the age of six, Kavita Marwah created a bank account for her son Mohik. He now knows the definitions of terms like compound interest, interest income, and savings accounts.

Describe how banking channels operate.

Allow your youngster to accompany you to a bank branch or when you use an ATM. "Let them see how we buy a forex card, clarify to them how to make UPI transactions or transact on the web, to conceptually comprehend how it all works," said Deepali Sen, founder as well as partner of Srujan Financial Services LLP. These are a few useful features of banking that are worth elaborating on.

For her kid, Shreeram has created a bank account. Having visited the branch, he is aware of which departments handle different assignments.

Controlling debt

It's critical that young children learn about managing their debt. "If you're not exposed to this concept from a young age, it can be quite challenging to understand, and as an adult, you have to learn it the hard way," Dhawan said.

For example, if her kid begs for a loan and goes over his allotted amount of pocket money, Shreeram charges him interest. She has warned him about the dangers of using credit cards carelessly and the consequences of defaulting or making late payments, even though he does not have one.

Tasneem Kagalwala has decided to use board games like Monopoly to instill in both of her young children the value of sound money management.

Plays and classes

Kagalwala uses board games like the well-known money-related game Monopoly to educate her children about the pleasures and perils of handling money. "Money games are fun for the youngsters. They have learned about purchasing real estate, collecting rent, filing taxes, and other topics by engaging in these games, according to Kagalwala.

Children of all ages may participate in a number of online programs on money management. During the lockdown, Shreeram had registered her kid in one. He picked up some fascinating knowledge about handling money. According to Shreeram, "He learned about credit cards, banking, compound interest, interest rates, and more."

Director of learning & innovation at BrightCHAMPS Prasanna N. Muley said, "The models and real-world assignments given in these workshops have helped kids make substantial improvements in the way they think about money." Muley teaches financial literacy to kids. He says that after attending his class, some kids prepared the budget for a two-week family trip, 90% of the kids spoke to their parents about insurance, and 20% of the kids began budgeting their spending.

Put your words into practice.

This is crucial because kids are seeing how you spend your money and your own feelings of joy and worry about it. This creates an imprint on them at a very young age. According to Dhawan, "your children will be better at managing their money when they're turning adults the better you are at modeling good financial conduct."