Nidhi Sinha :Live Mint :25 Nov 2012
Children learn from parents, so the first step is to be disciplined yourself
Gurgaon-based architect Ishvinder Kaur, 36, thinks her five-and-a-half-year-old son Vikram is too small to be taught about money. Nevertheless, Vikram has his own purse, which he doesn’t forget to carry whenever he goes out cycling with his mom or friends. Kaur says she didn’t introduce the concept of money to him rather he introduced it to himself. “Once we were out cycling and crossed a retail store. He wanted something but I was not carrying my wallet and I told him so. Two or three similar experiences later, I found him taking out a small bag from among his toys, which he said was his purse. He thought the purse was enough to pay the retailer,” she says. Kaur used the opportunity to tell him that he needed to carry money in his purse to be able to buy himself something and gave him Rs.5 with which he bought some sweets later.
Like Kaur, a lot of parents may not make a conscious effort to teach their kids the value of money, yet it is bound to spring up at some point or the other. In the Indian context, teaching good money habits becomes more challenging with social values closely intermeshed with the value of money per se.
“Good money habits to me means having the freedom to spend from a play account, saving up a little by little even at a young age and realizing the value of what we already have as a privilege,” says Srividya Rajaram, clinical psychologist, Adiva Healthcare Pvt. Ltd.
Pulling up your socks
Like it or not, children love to copy their parents and while they have a whole world to grasp from, they learnt the most from the environment at home. So if you want your child to wash her hands before every meal, you need to first ensure that you do the same yourself. The same is true for most other aspects of life, including your attitude towards money.
“Children learn by example. To start with, parents need to understand that money is a means to good things but not an end in itself,” says Suresh Sadagopan, a Mumbai-based financial planner. So if as a parent, you want to splurge on an LED television, when you already have a LCD at home, your child’s demand for a touch phone may not be unreasonable after all.
“Money is one form of prosperity and abundance in life and is a physical expression of the same. Parents need to model abundance of love, appreciation, the act of giving and sharing with joy in their behaviour,” says Rajaram.
So before you even start on your kids, you ask yourself some questions: do you have a budget, do you save regularly, do you set goals, are you able to control your greed when shopping? Children learn from behaviour, and only behaviour, Rajaram adds.
The earlier, the better
Like Kaur, many would think that money concepts should be introduced when a child grows up enough to understand it. But that is not the way it works. As a parent, you would stand for certain values, which the child would start grasping very early; the idea is to take this instinctive learning forward in a meaningful and constructive manner. As mentioned earlier, Kaur, too, has made a start in her own way.
In fact, “the earlier, the better”, says Rajaram. There is no age to introduce the concept of money. So what could be the tools to help one do this apart from self-discipline? “At a very young age, the concept of a piggy bank can be introduced, which could go on to include games relating to money and eventually, when the pocket money starts, explaining the basics of expenses and saving,” says Sadagopan.
So giving your kid a coin when going out for a walk and telling her to keep it safe with her and buying a candy for her with it at the end may help her to be careful about money.
Creating a value system
Every rupee that can buy a good or service has a monetary value attached, but it may not necessarily be enough to calculate its worth. And you need to communicate that clearly with your child. For example, when you consider a card your child made for you invaluable, tell her so, not forgetting to explain why you think so. “One needs to teach how to judge the worth of something not just in terms of money but how much of labour and hard work must have gone in making it,” says Rajaram.
Putting a monetary value to the things you do and comparing them with what you could do with it may help develop choices and the ability to prioritize things. “Teach value by example. A movie outing is equivalent to, say, one week of groceries, or to put it another way, x number of ice creams. Similarly, a mobile phone a child may want may be equivalent to 10 days of work for a parent or half a month’s family expense,” says Sadagopan. Such comparisons may make it easier for your child to choose between a car and downpayment for a small flat when she grows up.
“Children should also be sensitized to the virtues of charity and sharing,” says Sadagopan. Learning to give to the less privileged is important, says Rajaram. The idea is not to let money overpower you even if it is in abundance, which is in sync with traditional Indian values.
Teaching through experience
Letting children experience certain things are the best way of teaching them.
Often, parents complain of handling peer pressure. But if you treat children as young adults and make them participate in home finances, certain things may become clear to them. “Children will understand if they clearly know where the parent is placed and their capabilities and limitations. If this is conveyed to them in a straightforward manner, they will understand and will not come with unreasonable requests. An honest communication is important as children grow up, especially in their teens.” This will not only help handle peer pressure but also help the child monitor his own expenses and spend her pocket money well. In case of privileged families, “with slightly older children, parents should share how some privileges are funded in life”, says Rajaram. After all, you want your child to spend money mindlessly.
Here’s another example. Doing charity by itself may not make sense to children. However, taking the child to a slum area in, say, the winter season and pointing out to the need of blankets and proper clothing may leave a lasting impression.
Basic handholding
This can happen using the tools of a savings bank account and pocket money. Encourage your child to set small goals, such as buying a battery car. Once the child accumulates enough money through lump sums received from relatives and parents and through regular savings from her pocket money, she will get a lifetime lesson in saving and patience.
Sadagopan wants parents to be even more involved. “When the parent gives a sum as pocket money, they should sit with the child and help him budget it. The discipline of staying within the budget should be taught. For good measure, if they stay within the budget, there can be a bonus which the child could get to reinforce a good habit,” he says.
Or if they reach a goal, you can add an equal amount as bonus to buy, say, an iPad. “If they can save something from their pocket money, buy something of their choice,” says Rajaram.
As much as parents expect and want their kids to be understanding, parents themselves need to accommodate with certain aspirations of kids and be sensitive to their requirements.
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