Making teenagers money-smart...

Here’s how parents can make their teenage children smart with money...

Personal finance is one subject that impacts children throughout their life. Yet, it largely remains ignored in schools and at homes. While parents do understand the importance of teaching money management to their children, a lot of them have conveyed that it is difficult to put this into practice. Parents have told us that digital avenues, online courses and ‘money management’ workshops would be of interest to them. The views garnered from parents with teenage children clearly accentuates the importance of great money habits and financial prudence.

With teenagers, the best way to usher them into learning ‘money management’ would be to make it enjoyable. Parents can do so in a few simple steps:

• Let them manage money independently: Children enjoy being given an allowance for a defined period, say a week or month, and then being allowed to manage it independently. It is important for parents to give children such allowances and allow them to make affordable mistakes with money. By being updated about their spending and setting virtual guide rails, parents can enable children to enjoy the process of money management all by themselves. What better way to learn the ropes of this important life skill.

• Introduce them to budgeting: One of the most basic aspects of managing money smartly is to create and maintain a budget. Ask children to document their expenses and the money they have received as allowances. This makes them think and sets them on the path of smarter money management. The budgeting mindset also helps them to manage other critical aspects of life better – the most important being ‘time’.

• Encourage them to save: To teach savings, give a challenge to your child to save a certain percentage of their allowances. Tell them the first priority should be to save before spending the money on any need. Make the process of ‘savings’ meaningful to your child by creating a savings chart to track down their progress. Discuss the savings chart with your children and give them your perspective.It would be a great learning experience for them.

• Leverage digital avenues: Parents can leverage digital and mobile-based money management solutions to initiate their teenage children into smart money management. Parents can give allowances and emergency cash to children instantly using these solutions. Further, they can receive updates on the ‘expenses’ made by their children using these digital channels via a few clicks on their smartphone. What’s more, they can analyse the spending pattern of their children across categories such as food, shopping, entertainment, etc., and have meaningful conversations on smart money management with their children.

Parents should leverage technology and digital payments to introduce children to smart money management and raise a financially prudent young generation of Indians.

(The author is the founder, Slonkit)