Here's how to hold your child's hand through the various monetary milestones in his life in order to ensure that he grows up into a financially savvy adult:
1) 5-6 years:
Kid's milestone: > Understand the concept of money.
> Know that money buys things, services.
Parent's role: > Help the child identify various denominations, sort coins by sizes, play money-based games.
> Take him shopping, make him pay for small things.
Pitfall: The child has a very small attention span. So if money learning is not made fun, he will switch off instantly.
2) 7-9 years
Kid's milestone: > Start the saving habit.
> Shoulder fiscal responsibility and make spending decisions.
> Set short-term goals.
Parent's role: > Buy him a piggy bank to collect change. Open a bank account for depositing monetary gifts.
> Start a weekly allowance. Fix the things you will not buy for him like candy, ice cream, etc. Give him the freedom to decide what he wants to buy.
> Explain how he can buy an expensive toy by saving as opposed to spending it on snacks on the first day.
Pitfall: If the kid finishes his allowance before the stipulated time, do not offer him an advance or pay for things he needs. He will never learn fiscal discipline.
3) 10-12 years
Kid's milestone: > Carry out financial transactions.
> Learn the value of money.
> Set medium-term goals.
Parent's role: > Open a bank account that allows your child actual transactions like signing a cheque or making deposits.
> Pay the child for minor errands such as washing a car or taking care of a younger sibling.
> Ask the child to buy shoes or gizmos fro savings.
Pitfall: The child is likely to lend money to his friends. Stress the importance of getting it back.
1) 5-6 years:
Kid's milestone: > Understand the concept of money.
> Know that money buys things, services.
Parent's role: > Help the child identify various denominations, sort coins by sizes, play money-based games.
> Take him shopping, make him pay for small things.
Pitfall: The child has a very small attention span. So if money learning is not made fun, he will switch off instantly.
2) 7-9 years
Kid's milestone: > Start the saving habit.
> Shoulder fiscal responsibility and make spending decisions.
> Set short-term goals.
Parent's role: > Buy him a piggy bank to collect change. Open a bank account for depositing monetary gifts.
> Start a weekly allowance. Fix the things you will not buy for him like candy, ice cream, etc. Give him the freedom to decide what he wants to buy.
> Explain how he can buy an expensive toy by saving as opposed to spending it on snacks on the first day.
Pitfall: If the kid finishes his allowance before the stipulated time, do not offer him an advance or pay for things he needs. He will never learn fiscal discipline.
3) 10-12 years
Kid's milestone: > Carry out financial transactions.
> Learn the value of money.
> Set medium-term goals.
Parent's role: > Open a bank account that allows your child actual transactions like signing a cheque or making deposits.
> Pay the child for minor errands such as washing a car or taking care of a younger sibling.
> Ask the child to buy shoes or gizmos fro savings.
Pitfall: The child is likely to lend money to his friends. Stress the importance of getting it back.
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