hat your youngster must know about money
Parents always want the best for their kids. This does not necessarily imply that you want them to have the most fashionable attire, the newest toys, or the coolest technology. Most likely, it indicates that you desire to keep them protected and safe. And you want to create a solid foundation for them so they can succeed in life.
The dilemma is whether you are imparting to your kids a valuable lesson that will affect their ability to succeed. Money play important lesson in our life . It is extremely important to understand the relationship of money in our life
“Everyday life transactions revolve around money. Money is involved in everything, including where we live, what we eat, what we wear, what we drive, health care, education, child care, gift-giving, vacations, entertainment, heat, air conditioning, and insurance. However, many parents aren’t assisting their children in developing proper financial literacy in their life.
Giving your children the gift of financial literacy at a young age will help the parents play a significant part in influencing how they feel, think, and value money. Understanding these fundamental ideas will enable your child to make wise financial decisions when they start working and earning money. Here’s how-
Basic Information :
- Budgeting – It is important to reinforce to your child the value of budgeting and how it can help them live within their means.
- Scaring off debt -Parents should convey to their children the issues related to having too much debt in their life .
- Saving – As is often said, if you save money, it will save you. Savings will help us live better lives tomorrow or buy the things we most want, therefore parents should regularly discuss the advantages of saving with their children.
- Knowledge of Banking & E-Banking– Parents should educate their children on the fundamentals of banking, including how to use the NetBanking, the many kinds of cards and wallets, and how they work. So, if children are taught how to use a bank at a young age, they are more likely to understand how to allocate money wisely and utilize their bank accounts to track their savings and spending patterns.
- Precautions against Fraudsters – When parents introduce their children to the banking system, they should also educate them about the potential for fraud in the same.
Should have a Profound Understanding :
- Power of Compounding: Kids must have studied Chapter Compound Interest when they were in school. So, we must relate it to reality, such as how it is used and how it affects long-term savings.
- Protection – Parents have a responsibility to educate their children about unforeseen circumstances that may arise in life. Educating them about the need for protection and the various ways that one might do so.
- Different Fixed Income Options: Kids should be taught about fixed income, its importance, and the range of possibilities accessible on the market. So, students will be aware of the various saving alternatives when they begin to earn.
- Risk & Returns : First and first, it is important to explain to children the value of saving money because doing so results in additional funds. Next, discuss the risk associated with various investments with them. Therefore, it is important to correctly shape children’s understanding of risk and return when they are young.
Better to have skills :
- Insurance: When we are talking to kids about the protection needed to deal with life’s unexpected events, we should also take the opportunity to explain insurance to them, including how it works and how helpful it is.
- Stock Market: It can be difficult to discuss stocks with children, but it can be made simple by asking them about common household items they see around and the company that makes them. So, by using this simple exercise, youngsters may learn about stocks and how they work.
- Mutual Fund : Due to the prevalence of social media today, kids must have heard about mutual funds. Parents only need to share their opinion on how it operates and what advantages investment in mutual funds offers.
- Charges involved in investments: Parents should explain to their children the costs associated with each investment option when talking about the market’s investment options so that the children understand that no service is provided without cost.
Conclusion:
By educating kids about these fundamental ideas, we can ensure that when they start working, they will be able to make the best financial and investing decisions. Your children will become savers rather than spenders if you teach them the importance of money from an early age. This means that you must start teaching your children the value of money as soon as they can count if you want them to be money smart.
Nivesh Ki Paathshala is always there to help you out if you need us. In case if you have any questions, you can respond to this email, and we would be happy to connect with you.