Sep 5, 2024
By: Ayush Mehrotra
This Teacher’s Day 2024, let's take a moment to teach our young ones some essential financial lessons that can help them develop good money habits for a lifetime. Here are some key lessons to impart:
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Encourage savings by gifting them a piggy bank or a savings jar. Teach them the concept of setting aside a portion of any money received, whether it's an allowance or a gift, to build the habit of saving, which can be used during emergencies or achieving a short-term or long-term goal.
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Introduce budgeting by helping them plan how to use their money for different purposes. Create a simple budget that includes categories like savings, needs and wants.
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Teach them to distinguish between needs (essentials like food, clothing, and shelter) and wants (non-essentials like toys or sweets). This will help them prioritise their spending and make informed financial decisions.
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Help them set short-term and long-term financial goals, like saving for a toy or a bigger goal like a bike. This will teach them the importance of financial planning and working towards achieving something.
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Explain the concept of borrowing and debt in simple terms. Make them understand that borrowing money has consequences, like having to pay it back with interest, which can be more than the original amount borrowed.
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Introduce them to the concept of investing once they are older. Use examples like how planting a seed and nurturing it can grow into a tree, small investments can also grow over time. Also, let them know about different avenues of investing and risks associated with each option.
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As the world is getting more digital every day, teach them about digital money, such as using online banking, wallets and debit cards and understanding the risks associated with digital transactions.
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As they grow older, explain that a portion of earned money goes toward taxes, tell them about different types of taxes levied upon us on different levels and how they are used for building public services like schools and roads.
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