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How to Raise Money-Smart Kids?

Top 5 Schools in Jaipur

In a study conducted by Cambridge University on the money behaviors of children, it has been found that kids can take on and learn new tendencies and processes as early as the age of seven. Thus, their attitudes and behaviors towards finances start taking shape even earlier than what we might think. In fact, this behavior stems from the fact that children start observing their parents’ actions and activities, including their financial conduct, from a very young age. So, instead of letting them take up vague and imprecise ideas by only depending on their observation, it is important for the parents to be deliberate in imparting the right financial habits and financial values to the kids.

Now that we have established the need to start on these lessons early, the other common query that we, at Banyan Tree School, have seen coming from most parents is the way they should proceed in giving these financial lessons to their kids. Most parents are not sure of whether they should really make the children sit down and discuss their finances or if they should let the kids pick up the basics organically by following their parents. We, at Banyan Tree, believe that in order to raise money-smart kids, it is better if parents take up a middle way and adopt a bit of both these approaches. Discussed below are four ways that can be highly effective in raising children who know how to manage their finances well.

Lead the young ones by your example

You are the biggest influence on your children, and just like all your actions, your practices for money management also leave a lasting impression on the young minds. Your actions like availing discounts, comparing products and services before buying, and limiting shopping trips as leisurely activities will help them understand the right ways of spending and saving money.

Teach the right ways of giving, saving, and spending

We believe that the first step of raising money-smart kids is to teach them that all of the money need not go into the huge spending pot. One of the tricks to instill this lesson in their minds is by giving them three jars with the labels of donating, saving, and spending. Encourage your child to divide the money that he/she gets equally in the three jars as this will not only help the kid in managing his/her finances but also teach him/her the value of donating to the needy.

Explain the basics of banking to them

Many of the banks have the option of opening savings account with low minimum deposits and even have special accounts for the children and students. You can start your kid’s lessons on banking early on by teaching him/her the basics of savings accounts, money withdrawal, interest, and the likes. We have seen that savings account is quite motivating to the kids in terms of saving money as they get to see their money grow further through interests.

Let them learn from the mistakes

Giving children small amounts of money as pocket money, or in return for doing household chores, is a great way of teaching them the crucial art of money management. However, you also need to be strict when they end up spending all of that money and ask for more. Make it clear to them that once they spend all their money, they won’t be getting any further finances all through the month, no matter what. This will make them think twice before spending and eventually they will learn to make smart financial decisions in the future.

We, at Banyan Tree School, ranked among the Top 5 Schools in Jaipur, believe that as one of the crucial life skills, there is no time too early when it comes to beginning the lessons on money management. We strongly believe that talking to the kids about the importance of managing finances and making them learn the art of money management at a young age will set them up for a brighter financial future. On our part, we, at Banyan Tree School, ensure that along with imparting the young minds with a world-class education, we also teach them the crucial life skills, of which money management is one of the most important skills that each child should be inevitably taught. We believe that with the combined efforts from the school as well as from the parents, our children can surely turn out to be financially smart individuals having a secure and bright future ahead.