Gift Your Children The Habit Of Saving And Investing

“Your children are your true wealth and treasure!” asserts Dada J.P. Vaswani, a learned Sindhi philosopher. He emphasised patience, proper guidance, and loving discipline as the qualities parents must cultivate to bring their children up in the best manner possible. While these values and ideals will help them evolve into worthy participants in the adventure of life, parents must also teach money lessons so that children realise the importance of money at a tender age. These lessons will also shape their spending behaviours and eventually lead them to save more, which is the first step towards wealth creation.

That also explains why most grown-ups perpetually grumble about lack of money. Most of us are neither trained on how to spend nor on the importance of savings in the formative years of our life.

How do you help your children develop a positive approach towards saving and investing?

• Discuss money at the dining table. It will help prepare them for the day they start earning independently. Teach them the difference between wants and needs. Passively involving them during the discussion of a family’s savings and investments may not be enough. Instead, actively encourage them to read a little about money and offer their opinions.
• Imparting money lessons should be practical and fun-filled. Use board games like Monopoly, Time and Money and Game of Life. Each of these games can teach a different lesson which can clarify money-related concepts and matters quickly.
• Instil the habit of regular savings by gifting them a piggy bank. Ask them to put some pocket money into it every day. Watching the piggy bank getting loaded with cash can be visually and mentally very satisfying for children. Empty the piggy bank at regular intervals to count the accumulated money. Children feel joyous looking at their money grow and feel motivated to save more by curbing their spending habits.
• Open a savings bank account in your child’s name when they are old enough to understand the meaning of banking. Please encourage them to deposit a big chunk of their pocket money and cash gifts from grandparents and relatives into the bank. Teach them about debit and credit entries and show their impact on the balance amount. This practical involvement would go a long way in shaping their attitude towards money.
• With the essentials and even the luxuries of life just a click away, patience is a virtue that has unfortunately been undermined. In the age of instant gratification, don’t accede to their demands quickly. Instead, train them for delayed gratification by saving first and spending later. Keep in mind that the principle of compounding works only with the twin virtues of patience and discipline.

For building wealth, investing and saving are more effective when they are cultivated as a habit. And our childhood years are the best time when such habits can be inculcated. These nuggets can help you familiarize your children with financial matters and grow a financial mind-set.