Personal Finance


Let me tell you this. Kids have a larger clarity when it comes to Money than we possibly could. They must not attach that much value to it presently but they do understand what it is to save and how it helps (they never want to break into their piggy bank but always ask you for money).

There are little ways to train these minds to bigger savings in the future

1. Help them start saving in their piggy banks - I have a friend who not only got her 3 year old a piggy bank to save, but also the kids of her near and dear ones to get them started. The excitement has been unmatchable. Help them begin with the 5's and the 10's and explain why they should save. A small technique I use is the example of a tennis ball which typically costs Rs 30. Tell them that you need to save 6 of these 5's to get there. Keep a paper initially and note down how much they are saving. At a significant number recognize their efforts and treat it with an award (trust me even a Frisbee would get them excited ).

2. All their Birthday money/ best grand kid money/ 1st rank money - explain the significance of saving it v/s spending it. Rs 1000 may not mean much and could easily be spent on a board game, but 4 of these could actually mean investing in a bond/ buying something meaningful.

3. Introduce them to the concept that they have it all - yes they do, way more than some other kids; I did not realize when I once took my 6 year old nephew to the orphanage to hand over some hand me downs. The questions amazed me and the answers all came from him.

  • They don't get to go on holidays - I am so lucky
  • They don't get to eat good chocolates - let me make them chocolate cookies once in a month
  • They don't get to read the books I get to read - let me pass on some of my old ones
  • They don't get to buy toys - let me ask my friends at school and we can get them some toys and games

On a visit to Blossoms (a second hand book store) in Bangalore I once explained to him how we could two books at the price of 1 new one ; and the immediate response was lets get 2 and give one away.

Kids are easily adaptable and very open to logic and change if explained correctly.

4. Ear mark goals that they have and keep monitoring - It could be as simple as buying an expensive tennis racquet. While it's the easiest for you to invest that Rs 5-6,000 for a premium one. You could build their 100's saved put it on a soft board, mark it in color and watch them get there.

5. DON'T SPLURGE - Splurging yourself and setting that precedence is an awful example for a child. They follow what they see. If you are somewhat frugal in your expenses , and leading by example they are sure to follow suit!
All the best.

Dipika Kalra - a Business Management Graduate in Finance and an Associate Financial Planner with 6 years experience across the field of Personal Finance. Experienced trainer and orator has conducted several work shops at various corporates and colleges . With passion of connecting in people,  brings her great joy in making money more conversational and simple to understand.