Dubai: Money plays a very important role in all our lives. In fact, many adults in UAE find it hard to manage finances efficiently and later land up in debts.
It’s very essential for children to learn about money management right from school. Children usually learn what they see their parents doing, especially in their growing years. Hence, parents act as teachers to their children. Parents should inculcate the word ‘savings’ into their children from the very beginning, so that when they grow up, they can take forward some of those lessons taught in their adolescent.
Parents need to prepare their children for the real world where they will be exposed to expenses, loans, incomes, debts and other money related factors. Below listed are some ways to make children financially responsible.
Giving pocket-money to your kids would be a great way to introduce money management to your children. Always make sure that, the pocket-money you are giving is age appropriate.
Another important factor that you should consider is to have a fixed deposit. You can give the money daily, weekly or monthly depending your convenience. But never increase the amount or give any additional money within the fixed period.
Through this simple method, you can inculcate money managing habits in your children.
Children are the most valuable asset. When you take your kid to a toy shop, it’s very obvious that they get lured by the sheer variety of games and toys around them.
You as a parent should not buy them everything that they lay their hands on. Ensure your child agrees on your budget before you go for shopping. For instance, let’s consider the agreed budget is Dhs.100 and tell your kid to pick up anything they like within the budget you have fixed.
Through this, your child will not only develop a habit of comparing price of the object and the value attached to it, but also helps them improve on mathematical skills.
Giving money to children after completing certain work is good. But parents should not reward their children for things like doing homework or showing good behavior.
If you give money for things which children are supposed to follow on daily basis then they will do it just for monetary gains. In case you have a little grown up child, make him/her understand the difference between doing work and completing homework.
In today’s generation everyone prefers to have a single child. And such parents have instinct of getting each and everything the child asks for, no matter how worse is their financial situation.
At times, such habit makes kids so adamant that on refusing certain things they start showing negative behavior. It’s the responsibility of the parent to make them understand why they refused to buy them what they asked for. Your answers might temporarily affect them, but eventually they will realize what you did was right.
Once your children grow up try to discuss your financial matters with them to an extend they can understand it. Talk to them about the advantages of saving money, your liabilities and investments.
Giving the example from real-life stories can help them relate to these concepts easier. Tell them the plans that you have made for their future like education expenses and their job opportunities.
Many children are very curious to know what is happening around them. So make sure that you keep your mind open for all their questions and answer them patiently.
Children learn certain habits by observing their parents. Hence, it’s very important for you to do what you say. If you pay your bills on time, spend smartly, and manage money well, your children will also follow your footsteps.
While teaching them about finances, always make sure that you keep it simple and fun so that they take it positively.
Piggy bank is a wonderful concept to develop money-saving habits in children. Even children love to fill their piggy banks right from a very young age. The most fascinating thing is, kids are able to understand value of money that goes into the piggy bank is very precious and will not like to give it away easily.
On the other hand, you can also introduce a system where you will agree to give some money to your child for completing a task such as cleaning up the room or helping in everyday household work. Through this, your child will understand the true value of money. Make sure that the money you give will go into the piggy bank and not spent elsewhere.
Once your child grows up, you can encourage them to open a bank account. A lot of banks across the country have introduced kids’ bank account with facilities like debit cards to get children exposed to baking.
Amit is an Independent Financial Advisor, based in Dubai since 1997. He is part of the prestigious ‘Million Dollar Round Table’ (MDRT), which is an elite club of the best financial advisors worldwide.
He has authored the ‘6-Step Financial Success Guide’, and the book ‘Creating, Preserving, Distributing Wealth’.
He helps business owners and professionals ‘Create A Second Income’ through investments.
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