In addition to bringing up children with good behaviour and ethics, every parent should also take up the responsibility of educating the children on money management and teach them to manage their finances well. Sometimes, in order to shield the child from the difficulties of the real world, parents tend to overprotect them from getting exposed to hard realities. But managing finances is an important tool as other life skills, as this ability helps your child to sustain in the fast paced world throughout the life time.

There are various simple ways that you can teach this aspect to your child right from their young age without really putting your child through a lot of difficulties. This knowledge serves as a tool for managing their hard earned money effectively. Children also start appreciating the value of hard work from this stage which is a very healthy sign.

When your child is between 5 and 10 years, teach them small chores and reward them when they complete it successfully. They should assimilate the concept that you work to earn money and it is not always easy. You should also teach the importance of good work ethics and also about rapport and adaptability. Try giving your child a little additional work a few days and train him not to complain.

Start a family piggy bank and encourage the child to drop a penny a day. This would introduce the concept of saving.

When they are between 11 and 14 years, you may even consider opening an account in a bank. Ask them to try and getting involved in more chores of their choice and propose bonuses that they can choose from. Teach them what is commitment and how they can earn more if they take that extra step. Be committed to put the money you have promised in the account and teach them how to keep track. Ask them to save at least 10% of their earning every month. This would be the time that they practically learn what is saving money. Try and teach them what is really necessary and how to prioritize expenses.

When children are between 15 and 18 years, you can guide them to check accounts and manage them. Supervise them but do not allow them to handle money completely on their own. Do not give them credit cards until they reach the age of 18. However, you may introduce them to debit cards. You can teach them about buying their necessities within the allotted budget at this stage.

During 19-23 year period, you can transition these young adults to financial independence. You may be there when they really need support but allot a monthly budget within which they have to manage their finances. If they can handle the college bills, allow them to manage on their own. Let go of them and observe how they manage the real world. This would make them financially independent when they are out of college and confidently march ahead. Only in case help is necessary, you need to provide support.

Kyle Oliart

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