Or, how to introduce your child to the idea of handling money in an affluent world
A Friend visiting from the UK narrated an amusing story the other day. His daughter, all of seven years of age, had learnt about recession on an exclusively-for-kids news channel, and solemnly approached him, offering to give up her pocket money. “I agreed immediately,” he laughed, “but my wife played spoilsport. The next thing I knew, my daughter was demanding an iPod costing £100!”
The incident, of course, was narrated in a lighter vein, but it set me thinking. | | | | Vital instructions on these subjects are best passed on at the dinner table, or in over heard adult talk | | | | |
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Where do kids in India learn about money? From their parents, is the obvious answer. A friend of mine makes it a point to ask her 10-year-old son to make payments in cash, calculate the change he should receive and tally it with what the shopkeeper gives back, while she keeps an eye on him. It improves his mental math and, as importantly, teaches him to handle money and appreciate, over time, the fluctuating prices of daily-use goods.
That’s why I was intrigued when I spotted an announcement tucked away amid summer camp and art competition listings in a Bangalore city magazine. Labeled a ‘Value of Money Workshop’, it said that over two days, financial analyst Harish Rao hoped “to enhance the money quotient” of kids in the 10-14 year age group.
What has changed in Indian society that tweens need formal classes in handling money? On a day when trading was halted for the first time ever on Dalal Street because markets had hit the upper limit, Rao explained that we needed to look anew at how we spend, save and invest because “there’s lots of money around”.
Going a step ahead of what this column had suggested in an earlier issue—that our kids were disadvantaged in money matters because they did not have our in-built thrift-is-gift radar—Rao pointed out that while, for our generation, affluence is a relative novelty, for the next, it will be increasingly common. Yet, enamoured of new cash, our generation may not be presenting them the right role models.
“We all have emotional money baggage passed down from our parents. How we behave with money is what is imprinted on our children’s characters,” believes Rao. “If either parent is a good bargainer, the child might pick up the tricks as well, and it’s a skill he will carry through life. On the flip side, a child may encounter the guilt-effacing uses of money, say if working parents make up for their absence with lavish gifts. He will absorb the message that material gifts make good a lot of things.”
As part of the homework after the first day, Rao suggested the children undertake an extremely important exercise: talk to their parents about money. It’s a fundamental step, but how many of us can honestly say we have ever taken it? Yet, as analysts and counsellors will tell you, breaking that barrier is the first step towards building up a healthy inter-generational relationship towards money.
It makes sense to introduce our kids to our ideas of money. Earning is hard. Spending needs to be smart. Savings are mandatory. Investments are essential. And, yes, to the concepts of the stockmarket and recession as well. While workshops are a great way to introduce these ideas, the vital instruction in these subjects is best passed on at the dinner table, or in adult talk in the hearing of a child. Not as guilt-inducing drills—such as “the rice you have wasted would cost Rs 2 in the market”—but as general conversation about price rise, availability and affordability. Encourage older children to handle their pocket money the same way you handle household budgets, and don’t be afraid of using intimidating terms like recession and cutbacks.
If it’s a whole new world out there, they need the language to tackle it as well.
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