Parenting Financial Lessons That Will Stick with Your Kids Through Adulthood
The complete lack of exposure to practical finance skills during the school and college years is something that most of us as Indians can relate to. While our education system has always been extremely thorough and robust in terms of imparting the best theoretical knowledge, it lacks when it comes to the more practical aspects of living through life.
Most of us have grown up with very little or no practical money lessons at all. This has been a far widespread problem, which is why our country even today has a negligible fraction of financially aware young adults. Given this reality, its important as being parents to make up for that gap, for there’s no escape for anyone from the reality outside of the classroom.
To that end, here are some ways by which you can help your kids learn some practical money lessons that are definitely going to benefit them in their lives:
1. Regular Involvement in Investment Decisions
While most parents choose to keep their children completely out of the ambit of their financial decision-making, it’s actually good if you involve your kids. By doing so, you equip them to learn as they observe you save and invest and think through your monetary actions.
By sharing how you plan and work towards budgeting and saving, you’ll put them in a better place to understand how to live in a limited budget and save effectively for investing purposes. You can explain to them about the massive benefit of compounding, and why investing early is always a wise call for growing money and wealth in the long term.
Also, say, if you’re investing in financial assets like property or mutual funds or anything for that matter, you can spend some time to explain to them the basics of your decision. You could discuss why you’re going for that asset, and what makes it beneficial for the long term.
Investing your time and practically explaining these things to them can go a long way into developing a sharp mindset for their future.
Explaining How to Rightly Expenditure Between Wants and Needs
As much as you love pampering your child and can do whatever you can to make each one of their dreams come true, it’s important that you teach them how to distinguish between their needs and desires. You can explain to your children that needs are important and must be fulfilled, but wants are not and may need to wait out depending on the expenditure involved.
