This Childrens Day, I could have started saying Pandit Nehru was born on 14 Nov.

1889 at
Allahabad. He was fond of roses and childrenhence this day is celebrated as Childrens
day!!
I did not do that simply because his family will over do it.even today and the bill will be paid
by us
However, lets us see what we can teach our kids about money
Given pushy parents and super pushy media, there is a lot of things we teach our kids. However
one thing clear is with all this exam, vacation, exam, unit test, one thing is clear. Nobody is
teaching your little darlings anything about money. While our childrens teachers share
responsibility for teaching them to read and write, they wont do much to help our children
develop basic financial literacy skills. Beyond simple addition and subtraction, there just isnt
enough time in the school day to do it all.
So whats a caring parent to do?
Take your childs money-management education into your own hands, of course. Heres how.
Its important to remember how your kids think when it comes to money. Most children are
concrete thinkers who can demonstrate progressively organized and logical thought but have a
limited ability to think abstractly. Preschool and elementary-aged kids will have trouble
understanding abstract concepts like inflation, interest rates, and saving for a college education
that is 12 years away.
However, when my year old daughter tells me the following things, I realize that she understands
money:
Daughter: Dad, I need money to buy a gift for Mom
Self: Why dont you use what is in your piggy bank?
Daughter: Dad, coins do not buy anything, I need notes!
At five, she understands that bread costs Rs 22, a car Rs 12 lakhs and a house Rs 100 lakhs. This
is only because of constantly talking with her about money unemotionally and factually. Thats
why, when I told her that we couldnt buy the five feet tall teddy bear because we dont have
enough money, she was worried that we wouldnt be able to buy bread. To her, no money
meant, quite literally, that our pockets were empty.
I should have said, We choose not to spend money on that so we have enough money for other
things we need to buy. Understanding the way your child thinks is the key to providing him or
her with a quality education in money management.
Here are some ways to help your literal thinker learn about money:

1. Piggy bank:
Buy your preschooler, a piggy bank and give her a stack of coins to put in it. Ask your child to
sort the coins in a variety of different ways shiny versus dull, big versus little. Know that he or
she wont understand for some years that a rupee saved today can be better than a rupee saved
when she is 30 years old, they should get a touch and feel of money. I make my daughter pay
money at the shop so that she understands the difference between coins, a small note and a big
note.
2. Pocket money
For older children, establish an allowance so he or she can begin to make independent money
decisions. Some folks will advocate linking the allowance to certain chores; I prefer establishing
the basic chores (e.g., making the bed, cleaning their own room, and setting the table) as
something each person does because they are a part of a family and it is their job. Be very careful
that they do not become too money minded and keep asking, How much will I get for looking
after granny when she is unwell? However, giving your child extra tasks (like washing your
car) for which he or she can earn money can teach her the satisfaction that comes from working
for a goal. Your child will also understand that the more work thats done, the more money he or
she earns a valuable life lesson. It also helps my daughter gets Rs. 50 per month for generally
being good, doing some non core work, etc. so when we go to a shop and she sees something
which I will not buy, she translates and says I will have to wait for 11 months to buy this. T
Also telling them saying your slokas regularly for 20 days non stop will earn you a new game
is not about bribing, but about negotiating and finding what your kid wants. For example if she is
willing to say her tables loud and clear for 30 days without a break, and you agree to pay her Rs.
40 for every day of good performance, you can allow her a discretionary Rs. 1200 next you go
shopping. Of course it might include rules like you cannot buy another teddy or Barbie, but you
can see them valuing things.
All this is very, very useful later on in knowing the difference between price and value.

3. Value inculcation
One friend has done a brilliant value inculcation in his son. He gives his son 50 coins of Rs 5
each. The kid needs one coin every day at the recess. So, 22 of them are precious. He has only 28
to spare every month. Now when the kid says he wants a new tennis racket or new tennis shoes,
my friend quotes a price of say 50 coins, it takes his son about three months to accumulate the
same. And he treats each Rs 5 coin with far greater care than a 500 note. And it teaches him the
value of delayed gratification. A good way to control the Y gen.
4. Introduce financial jargon

Get your older children to understand words like saving, investing, donating, pension, financial
goal setting they will thank you in the future.
5. Bank account
Opening a savings account, touring a bank vault, using the rupee-counting machine, comparing
prices, and paying for items and receiving change are a few everyday ways to learn about money.
My daughter was so happy that she opened the bank cover and quoted the pin number. What
she was actually reading was the pin code on the cover! But that is a teaching opportunity for
me!
6. Summer jobs
Encourage your child when he or she tries entrepreneurial ventures like buying crackers in the
wholesale and selling in retail, baby-sitting for the neighbors, or starting a dog-walking service.
Theres no substitute for learning on the job. I grew up in a Gujarati locality where everybody
had a business, so finding my daughter a summer job will be easy for me. However it is not very
difficult if you are not fussy.
7. Lead by example
Last, but not least, be mindful of how you talk about money. Do you complain about bills, fret
about money, and always use negative terms about finances? Dont be surprised, then, if your
kids feel negatively, too. I have heard about a father who has 2 houses in the same building
they stay in one and have rented out the other. The father kept saying what will happen if our
building crashes I will lose both the flats, another father who kept saying psu jobs are the
bestand they are secure. Sadly that mans attitude is also passed on in toto to the son and the
daughter. The man who was in a PSU has retired 4 years ago and is still awaiting his provident
fund I believe the union is holding it up!!
If you need some financial refreshing of your own, make full use of your this blog. I hope to fill
it with right financial gyan without forcing you to buy anything. Getting yourself on the right
financial track is the best lesson of all for your kids. So, parents, remember that some lessons still
start in the home. Managing money wisely is one of them.