Tag: private wealth management
Establish the habit of spending pattern
Brief on Establish the habit of spending pattern
From the very beginning, the school going children should start talking about important information about money management, which could make them understand the difference between saving and fraud. This will prevent them from fretting in the future. Parents panic to teach their children about money management. But experts believe that no degree or specialized knowledge is required in finance.
Initially from childhood, sending children to nearby shops and shopping center’s for small household chores can also make sense for money. Teaching money management to children, “It’s not much of a conversation. It can come in many rounds of communication. Habit of spending pattern isn’t require to wait until the children are 18 years old or until they are ready to go to college.
Make your children aware about financial circle – Working and process
Put a habit of saving money from childhood, and get an attractive Piggy Bank. Ask children to store a saving amount in the same. Explain to them that you can buy things you like, such as bicycles, skates shoe, cricket kits etc., with the deposit in Piggy Bank. Explain the importance of money to children from childhood. It is also necessary to make the children aware that the credit card company sends a bill at the end of every month and need to pay huge interest and other charges if you do not pay the bill.
You can set a lower limit (for example, two to three thousand rupees) on that card. While going out, try to shop alone for big grocery orders, and some time take child to shop. It will be beneficiary in many ways as togetherness generates a strong bonding. Make them learn about bargaining process. For older children, though, a trip to the store can be a learning experience in terms of nutrition and economy. It is the best way as well as very helpful to “Establish the habit of spending pattern”.
Initially allow the child to do only small monthly purchases. These could include things like food, putting petrol in a bike, and paying your mobile bill. Once children start doing these tasks easily, they can be allowed to do more shopping. As a parent, you should clearly set some rules for your child. You should tell your child that every month you will monitor the card bill yourself and see what things and how much money has spent.
The most important thing is that the parents should tell the ways of avoiding the antics of the fraudsters at the very beginning. They should be told at the very beginning of ways to protect their privacy and to avoid misuse of data. It should be the habit of children to check and read the mandatory SMS alert coming from the card issuing bank every time they swipe the card.
Tips to add financial behavior in children
Children should also learn to use plastic money. By getting children to deal with plastic money, they get information about how these things work. Through this, children can be taught the correct and responsible financial behavior of these products in future.
Allowing children to spend or financial freedom. It may seems risky at first sight but necessary. At an age when children are less understanding and tend to make hasty decisions, the risk of uncontrolled use is greater if they are given a card to swipe in their hand. For this reason, parents should work as a regulatory institution.
Parents should inform their children about plastic money. Living in joint family, provides an easy environment for spending pattern. So At present, world wide situation of mandatory lockdown seems as favorable tenure to generate the habit of spending pattern. Why not do utilize the time. At this time, you can teach your children how to use plastic money.
In most Indian families, children still receive pocket money in the form of cash. The widespread of online shopping and digital money has changed the way people shop and spend. However, children still depend on their parents for common online transactions, such as recharging their mobile phones and ordering food etc.
What increases the financial literacy in children
In order for children to understand money transactions, etc., first of all you have to enable them to understand the difference between their need and desire. Pre-school going children or some of their adults do not understand these subjects. But they can understand the needs and desires.
Families spend their money initially on food, shelter and medical needs. Meanwhile, shopping should be done only after all necessary requirements completed. Everyone needs clothes, but the dress of a particular designer fall into the ‘desire’ category. Similarly, a house is a ‘necessity’ for the family, but all rooms should also have a private bathroom.
The head of the household always thinks of the family. With the help of this example, children can also help in understanding the transaction of money and its importance. Explain the cost on every purchase for financial literacy in children. Money is one of the primary needs for life. Along with explaining money management to children, also explain that the money used to buy goods will not be available back to you for buying other items.
“Let the children know about business and money transactions as soon as possible. Children should develop understanding about every aspect of life from childhood. One of them is money management. By giving responsibility to children on money related transactions, children learn how to spend and save money properly.
Money management easy tactics to make children learn
You have to watch your habits before teaching money management to children. Parental habits have the greatest impact on children. If you make the expenses wisely. Also, if you plan on saving, this habit will be formed in your child too. First of all, you have to bring these things in yourself, so that you will be able to become the ideal of your children.
When the child starts growing, explain to him that he is growing up now. Things do not remain childish when they grow up. They have to manage their expenses. For this, you have to teach children from the right age. If you want, you can give them their weekly pocket money to teach this to the child. This teaches children how to fulfill t heir needs throughout the week. Gradually your child will become expert.
Your child will develop an understanding of spending money in limited funds. If the child performs this task given by you very well, then you can sometimes take him for rotation. This step will go a long way in helping children learn money management. An easy way to explain this is to involve children in making everyday choices.
The grocery store is a major place for this learning for children in financial literacy. Where, children can be asked to decide to take one between two goods, with the explanation that money for both is not in the budget. With this, children learn to transact on the things they need.
Make children feel responsible and hold accountability
Ethics and accountability are closely related. If a child understands his responsibility and accountability, then he definitely maintains a high moral standard in his activities. By a combination of adoption, one adds high ethical standards in his performance, understanding his accountability. Hence accountability is particularly relevant in all manner.
These rules and orders included in moral philosophy as the internal controller. What we can call self-control. Responsibility for a task, means his ability to accept accountability for his decisions and actions, i.e. if he holds himself responsible for his actions and in any eventuality without being punished or rewarded for his decisions. is ready for pressure, it means that he is accountable.
Mainly children want to see themselves as responsible, powerful and able to respond to what needs to be done. They need this for their self esteem, and for their lives to have meaning. Children don’t want just to be doted on. They need, like all other, to feel like they matter to the world, like their lives make a positive contribution.
So, you don’t really need to teach kids to handle themselves responsibly in the world. You just need to teach them that they have the power to contribute positively, and to relate it, so that they want to do so.
Easy step to make children learn, understand and follow spending pattern.
Take them with you whenever you go for shopping. Whenever you go for market shopping, take the child along with you. This will make the child understand, how you are shopping for essential items in limited money. This will also make them understand about shopping. Teach children to spend wisely. Create a family budget by sitting in front of children. Include their pocket money in this budget.
Deal with the vegetable, fruits sellers in terms of money as price negotiating. Once my friend’s son spent the birthday gift money within a week. However, rather than prohibiting impulse purchases, this was a lesson learned on its own when her son later sought advice on how to better manage the money received for a fair. Similarly, other parents should also be ready to stand. Whereas a child makes poor decisions in terms of their money.
Then telling them their wrong decision is very helpful in bringing financial literacy to them. The child should also be taught that money is a movable asset, so always keep it variable or spend it on need, otherwise their value is lost. To become financially literate most children need to learn that they are related to values and behavior, not the technical aspects of how money works. An exception is credit (lending).
Keywords – educating about spending pattern, financial management, financial management in children, fundamentals of financial management, liquidity risk, money management, private banking, private wealth management, saving from useless expenditure, wealth management