As a parent, one realises the fact that each child is different even if they are siblings. They can have contrasting habits and personalities when it comes to their basic nature like eating habits, food preferences, toys and even the kind of friends they make while growing up. Understanding this, it becomes increasingly important to deal with them; teach them aspects of life-differently; even aspects of money matters.
By nature, some kids are spendthrift and maynot value money enough. As a parent it becomes critical to explain them the value of money. My eleven year old daughter spent not just the entire 100Rs (that I had given her) on a school fair she went to, but landed up borrowing another 30Rs from a friend for a ride that she wanted to take. Though borrowing from friends is not something scorned upon these days, but as a parent I had to sit her down to explain to her why borrowing money was not acceptable and why she should not spend more than what she has. If not explained now, I felt that it could lead to serious debt issues later in her life. As part of my work experience, I see a lot of youth nowadays who land themselves in the vicious cycle of credit card debt traps just because they enjoy living their lives on borrowed money.
The other side of the coin is my 13 year old son, who is quite careful with money but didn’t how to channelize it. It is usual to get cash gifts from relatives on occasions. Now that he was ‘grown up’, he wanted to keep the money with himself but didn’t know what to buy. I told him that he could let the money be in his bank account, explained to him the concept of compounding, and that the money could be withdrawn anytime by him to buy the book / gadget of his choice when he wanted to. He was not only elated; he made it a practice. This should help my son inculcate the habit of saving towards the goals that he has in mind.
Another interesting money habit is that of my 14 year old nephew, who likes to splurge all the money that he has (pocket money given by his mom) not on himself but his friends! His generosity gets mostly taken advantage of – as felt by his mother. Asked to intervene, his mom and I explained to him how one must save his pocket money for any contingencies he could encounter at school- the fare home by the bus / money to buy some snacks in times of hunger etc. I am quite sure he will make better friends if he helps them out in case of emergencies rather than spending it on their whims and fancies.
Explaining money management to children early is setting up a strong base for financially independent adults. Base your decision entirely on the child’s money habits and correct them at the right time. As a parent, we want them to be financially happy, right?