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Thursday, May 17, 2018

Seven Money Lessons for your kids this summer vacation!

Indian summer is here in its brightest best. Its mid-May, most of the schools have declared Summer holidys, and rest will declare in coming few days. The vacation which lasts for 1-1.5 months for the kids, also means double activities for the parents. Addressing unending-demand list of kids become a daunting task for parents. The schedule for travel, signing up for summer camps, short hobby classes visiting grand-parents and relatives tops the list in this country. While my childhood summer holidays memory is all about relatives and grand parents, things have changed a long in last two-decades in India. Besides spending time with family, a trip abroad or a trip to hill station in India has become a must.

The vacation has taken a new meaning all together for children as well as for the olders. It's a festivity. When fun-frolic stay at its best, it also can be utilised by the parents for inculcating some good habits in the children which go a long way, no less than their life time to be honest. Habits learnt in childhood stays long life. The small but important training may not always ensure the best results, but it definitely sows a seed of discipline.

Though the topics could vary individual to individual, my post would talk about the lessons of financial discipline we can impart on our  kids this summer vacation. We may chart out a activity calendar secretely and follow it slowly to achieve our goal. Financial discipline cant be taught in a crash course, but introducing during a holiday season will ensure it gets enough mindspace of your child, which can be practiced over the year. I have penned down 7 points you may consider doing, even achieveing 3 would be a good start. 

1. Take your child to bank branch 
On your next visit, consider taking your little one to the bank branch. Show him around. Show the deposit slip and introduce basic terms used in banking like demand draft, fixed deposit etc. Make him write your cheque book if you need to withdraw money. If your child is little older like 10 years, you can also show how bank statement looks like. What is a credit and debit.

2. Show them a mutual fund return calculator - This is easily available in mutual funds and personal finance website. You can show them the benefit of compounding, how a small sum each month could make a big amount in few years.

3. Make them pay electricity bill/gas bills - This mundane task will ensure that he /she is aware of household responsibility. A teenage kid can be introduced to this, be it manual submission or through online payments. It will give them an early introduction to their responsibilities

4. Fill up your health insurance form with your child by your side
If your child is older than 10 years  please consider this. You can make your child sit through this process, you already have a winner. In this process, you can introduce them to the importance of insurance, kind of insurance, what you should not hide don the insurance company.

5. Help them set financial goals - your kid may have various demands time to time. Buying a new cycle, guitar, games, travel etc. You may introduce him to the concept of "saving to buy". You may give him a piggy bank to save from their pocket money to sponsor their object of desire. It may or may not fully sponsor, but idea of 'saving first' will be sown in the young mind.

6. Reward them on reaching goals - keep your promise and reward them with some goodies, a small treat to encourage their efforts however, don't overspend on the reward. Remember the idea is to teach them financial discipline 

7. Teach them the small joys of life 
This is an important aspect to be taught to the kids early in their life. The life priorities should be aligned with the financial habits. Being frugal, disciplined, organised has its own benefits.
To introduce this aspect, you may give them live examples of recycling clothes, plastics. Cooking at home together is as much fun as dining out. Life is all about balancing. Teach the kids to enjoy the small joys of life.

Remember - they will follow your action more than words
Teaching kids good manners is a priority for parents. But, kids follow your action more than your words. They take up from visual cues more than verbal instructions. Overshopping, unplanned expenditures in household will be observed and absorbed by the young ones faster than you think!

Money management is fun thing. It's a learning process and we can take it up anytime, may be this summer while teaching the kids, we end up learning some good habits and enjoy it too!

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