How to put the ‘Fun’ in ‘Fun’d Management!

Research psychologist at Clymbe. She aspires to dwell deeper into mental health in education through art and experimental theories.

Sanyukta Singh

March 1, 2021

Why teach money management to kids?

Research says when a kid is deprived of certain things as a child, they tend to over do that activity as an adult, perhaps to make up for it. So, when you deprive or overregulate the money you give your kids, they might tend to overspend as adults when they grow up or not know how to spend their money effectively.

Many children don’t have the patience to wait for the right time to buy things. They also don’t realise the market price for certain products. The concepts of interest, deficit, credit seem alien when people actually step into independent living.

As a parent, when did you learn about these financial concepts? Was it easy for you to manage your funds when you stepped into real life?

What would you want to change about your parenting when it comes to teaching your child about finance?

Life today has changed drastically from what it was 40 years ago. The parents of today were children who were a part of a completely different Indian economy where spending money on basic necessities was the most important objective. But, in today’s world, the necessities have changed. With the current economy and the technological advancements, we are face to face with new necessities. In such a scenario, how do we make the adults of tomorrow financially adept?

How to teach them money management skills?

  1. Choice: Involve your kids when you make your financial decisions. Think out loud and explain to them how you make a decision on spending. For instance, take them to the supermarket and explain why you bought milk from a certain brand as opposed to the other. Did you buy it because it cost you less and gave you the same quality as others? Did you buy it because you really needed it and couldn’t postpone the purchase? Explain what drove you to make the decision. Then give your child a list of materials to buy and allot them some money. Observe their thought process for choosing the items. Any learning should be interactive and practical for it to make an impact.
  2. Saving: There are many activities you could indulge in when your child demands you to buy an object, say a video game. Ask them to save up. Make three boxes and label them, “Saving’, ‘Spending’ and ‘Sharing’.
  • Saving: Teach them how to save money for whatever future expenses they might have. If they are waiting to buy a new update on a video game or shop for their birthday, they can save up and wait for the right time to buy.
  • Spending: This is for their daily or monthly expenses on say canteen food, stationary supplies and picnics with friends.
  • Sharing: This could be an innovative box. You can teach your kids to collect money and share it to a charitable trust or to feed the poor, animals etc.

It is very important to inculcate the value of money in the minds of children. But is controlling the pocket money, the only way to do that ? What if we gave a little financial independence to the kids, with a budget for a week or a month? How would that work out? Children today are becoming more independent at earlier ages as compared to the freedom their parents faced. With technology and social media, children are engaged in not just entertainment but also earning money through innovative ventures like the current rise of thrift stores, art accounts, social influencers etc on social media.

A lot of arenas lie ahead to explore. Sometimes we need to experiment and educate ourselves to do the same for our children! Don’t you think?

Research psychologist at Clymbe. She aspires to dwell deeper into mental health in education through art and experimental theories.

Sanyukta Singh

Research psychologist at Clymbe. She aspires to dwell deeper into mental health in education through art and experimental theories.

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