Money Management for Kids: 5 Important Lessons to Consider - Muvin

1. MONEY MANAGEMENT FOR KIDS: 5 IMPORTANT LESSONS TO CONSIDER We all give our kid's money management lessons one way or the other, knowingly or unknowingly. Kids tend to replicate what parents do – whether it’s shopping habits or cutting down on expenses to save, or even spending irresponsibly sometimes, children tend to pick up on parents’ habits. This speaks of how teaching your kids money management is all about setting a good example by being financially responsible. Having said that, here are 5 important money management lessons for kids you should consider: START WITH CASH AND THEN MOVE TO BANKS With young kids, you can start with the basics by giving them tangible money to use. Be it giving them a small weekly allowance or inculcate saving by putting money in a piggy bank, physical currency can help build the foundation of money management for kids. As kids get older, into their tweens, you can begin to teach them about banks, savings accounts, and why it is important for proper money management. You can teach kids of this age group to save by easily putting their monthly allowance in a digital bank account with interest benefits. This will help build a solid foundation of money management and teach your kids to save money. TEACH THE IMPORTANCE OF SAVING AND SPENDING RESPONSIBLY Teaching children how to keep money with oneself won’t do the trick, you have to also go ahead and teach them how to spend it responsibly. Before you go and teach them how to save, you can first build a base by teaching them how to spend responsibly. For example, let your kids set goals for themselves, be it towards a bicycle or a gadget, having something to save for can act as a great motivator. This way you allow your kids to decide for themselves whether it is worth saving for or not. To help older kids track their savings or their monthly expenditure, you can set up a money management app. Not only will this help your kids in learning how to spend responsibly it will also parallelly teach them how to save effectively. muvin Neo Bank, brings an easy-to-use seamless banking experience for kids through an engaging mobile app with a wide array of features like saving goals, expense tracker, financial literacy videos and a contactless transaction cards with category-based spending limits.

2. TEACH THEM THE IMPORTANCE OF EARNING MONEY The concept of allowing our kids to earn their own money is not very common in India. What we don’t realize is that it is important to teach them the importance of earning money. Sometimes kids get carried away and tend to develop a sense of entitlement which hinders their overall development. To avoid this, you can assign your kids household chores such as making their own beds, cleaning their room, taking out the garbage, etc, in exchange for allowances. For older kids, they can take up internships which could help them in understanding the importance of hard work. TEACH KIDS TO COMPARE BEFORE SHOPPING Kids are quick to grasp things, hence, if you teach them how to compare their options before going ahead and buying something, you would be able to help in developing their money management skills. To instill this habit in them, draw up your shopping list and compare the price of each item from different stores & websites and buy the product that costs less, without compromising on the quality. This way you will be able to teach them how to get the best out of their money. TEACH ABOUT CREDIT IN AN AGE-APPROPRIATE MANNER There comes a point in life when people borrow money, but somehow due to mismanagement of money, they fail to make timely returns. To help your children to make sound financial decisions in the future, it is imperative that they understand the concept of credit early on. For young kids, you can be a make-believe bank for them, from where they can borrow money if they have exhausted theirs on conditions of interest and a payment due date or deductions from their weekly/monthly allowance. While doing this, also explain and set consequences of not paying their dues on time. This way you will be teaching your kids money management in an easy-to-understand and effective manner. For older kids, you can teach them banking through digital banks for kids or even demonstrate how you do your own finances. The bottom line It is important to visibly demonstrate financially responsible behavior in front of your kids in order to teach them important money management lessons from an early age. If the foundation is strong, the building will be stronger. Similarly, if we inculcate financially responsible behavior in our kids from the

3. beginning, with time they will be able to manage their finances in an effective manner throughout their life. Original Source - https://www.muvin.in/blog/1rz1FNJeIYDaqRHpGYc8d5