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A kids road to financial literacy

O Learn & Keep 16 The Economic Times Wealth, October 22-28, 2012 KID'S MILESTONE PARENT'S ROLE • Understand the concept of • Help the child identify various denominations, sort coins by sizes, play money-based PARENT'S ROLE A KID'S MILESTONE money. Akid's road to financial literacy • Know that money buys things, services. PITFALL Start the saving habit. • Buy him a piggy bank to collect change. Open a bank account for depositing monetary gifts. • Start a weekly allowance. Fix the things you will not buy for him like candy, ice cream, etc. Give him the freedom to decide what he wants to buy. • Explain how he can buy an expensive toy by saving as opposed to spending it on snacks on the first day. If the kid finishes his allowance before the stipulated time, do not offer him an advance or pay for things he games. Shoulder fiscal • Take him shopping, make him pay for small things. responsibility and make spending decisions. • Set short-term goals. needs. He will never learn fiscal discipline. KID'S MILESTONE PITFALL The child has a 7-9 very small attention span. So if money learning is not made fun, he will switch off instantly. • Carry out financial transactions. 5-6 YE ARS YE ARS • Learn the value of money. • Set medium-term goals. Here's how to hold your child's hand through the various monetary milestones in his life in order to ensure that he grows up into a financially savvy adult. PARENT'S ROLE • Open a bank account that allows your child actual transactions like signing a cheque or making deposits. 10-12 YE ARS Pay the child for minor errands such as washing a car or taking care of a younger sibling. • Ask the child to buy things like shoes or gizmos from his own savings. 16-18 YEARS PITFALL 13-15 The child is likely to lend money to his friends. Stress the importance of getting it back. YEARS Text: RIJU MEHTA Design: CHANDER KID'S MILESTONE PARENT'S ROLE KID'S MILESTONE PARENT'S ROLE PITFALL Understand investment Learn budgeting. • Educate the child about all investment options, encourage him to start investing a part of his allowance. Encourage him to take an education loan, if necessary, to induce fiscal responsibility and discipline. Also tell him about the basics of taxation and insurance to prepare him for his next phase of life. • Show him how to make a ledger of his income and outgo so that he can spend-- on friends, gizmos, dining-- Make sure the kid does not share his avenues, loans, taxes and • Know about credit and personal information on the Net. insurance. debit cards. • Take up part-time jobs. • Understand household budgeting. PITFALL and live within his means. Avoid getting a credit card for the child as he is too He can do chores like caddying or working in a bookshop. It will keep his ego in check and teach him the value of labour. Include the child in family's financial discussions on budgeting and take his inputs. Tell him all about credit and debit cards, even get the latter for him, but have him use it young to balance its virtues and risks. only under your supervision. © CHANDER SHEKHAR CREATED FOR ET WEALTH

A kids road to financial literacy

shared by chander.shekhar on Mar 06
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Here is how to hold your child's hand through the various monetary milestones.

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Economy
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