Why wait until they're in the real world, when handling finances goes on their 'most-feared' list? Start while they're young suggests Avril-Ann Braganza
Give them a piggy bank, but let them earn it
A weekly allowance from a young age will receive a warm welcome from kids at any age. But don't dole it out to them. Just as mommy and daddy earn money to manage the house and buy new things, let your kids earn it by doing small chores at home. Besides the joy of seeing their piggy banks fill up, they will also learn how to save and spend, and develop a sense of responsibility. You can go a step further, by giving them three little piggy banks or jars with labels—SPEND, SAVE, CHARITY. Each time they earn a little cash, they can divide it into these three jars (or they could take turns each time they earn to drop it into one of these jars). That way, they can experience the joy of buying something that they really want with their own money, save for the future as well as learn the joy of giving. Everyone happy?
Involve your kids in household shopping
Get them to make grocery lists and give them a budget; let them be involved in the running of the house so that they understand that money is spent on more than just their toys and gifts. On a notepad, ask them to write down how much has been spent and on what. While walking down the aisles at BigBazaar, ask them to compare prices of one product against another and look out for offers. Inform them why picking up a larger pack or buying non-perishables in bulk might be more economical.
Don't use credit cards in front of them
Using debit or credit cards around kids may not give them the required exposure to money and they'll soon believe that that magic plastic card will get you anything you want. So mum has ₹3,000 to spend at the mall. She needs to buy new dinner plates, but sees a new dress that she really wants that costs ₹3,000, but because she hasn't carried her credit card, she has to now choose between something that is needed versus something that she wants. Also, you couldn't really blame them if they wanted things they don't really need, if you keep splurging!
Talk about money in casual conversations
Don't hide things from them. Talk about your investments in shares and the stock market. Explain financial terms in a casual conversation and invite questions from them. It will help them learn finance is important, but not scary.
Don't give your kids a loan if they've spent all their money already.
If kids think they can get a loan from their parents, because they've suddenly seen something they really want after spending all their money, they won't learn to value money. By not giving in to their loan request, they will have to learn to make smarter choices and think, 'Do I really want to buy that ice-cream I have a sudden craving for or should I save my money for something I might want later?'
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