Money matters


Catch em’ young, should be the catchphrase to inculcate financial discipline in kids. Start with small steps and see your child become financially responsible, says A.S. Iyer, after speaking to a cross-section of parents.

“It’s not about the money, money, money
We don’t need your money, money, money
We just wanna make the world dance,
Forget about the price tag…”

Thus, go the lyrics of the song released a few years ago called Price Tag by Jessie J. To refresh your memory, the song talks about the futility of money and brand names and all that matters is making the world a better place to live in for everybody. Though the song is some five-odd years old, its meaning doesn’t seem to have been diminished with time.

In fact, we are in a kind of a double burden situation, where on one side there are many money-minded individuals, while on the other, there are individuals who do not know and understand the value of money. Here, we try to introduce ideas to you that might help you let your teenage children make better financial decisions and grow up to be financially responsible individuals. After all, the best way to make independent and responsible individuals is by starting young and nipping the problem in the bud.

Baby steps
There is a growing need among parents and teachers alike to introduce their child to financial matters early in life, for a plethora of reasons. For starters, many parents say they don’t want their child to take things for granted and want them to learn to value the privileges they enjoy – most of which come from hard-earned money. And so, most parents opt to take their children out to shopping trips, often to grocery shops which form the first of the many lessons for the kids in financial matters.

Radha Shivakumar, mother of 14-year-old Vaishnavi and a Chartered Accountant with a multi-national, says shopping trips were some of the first ways of introducing her daughter to the concept of money – of giving and taking. Radha says, “I told her how if we give a certain amount of money, we get a particular thing when we go out on shopping trips.” Similarly, Radha shares, every time her daughter asked her to take a holiday from work, she would explain to her how only when she works in office does she get money.

It remains important that finances are introduced in the early years of childhood says Clinical Psychologist and Counsellor, Varsha Patkar. “Though there are theories that put an age cap that suggests most of an individual’s personality is developed by the age of seven, I’d not necessarily subscribe to it. That said, it is necessary to start from a young age.”

Need v/s wants
A concept that’s hard even for the adults to deal with at times, however, is one of the most important steps in being financially independent. Reju and Sitara Nair, parents of five-year-old Sasha say they introduced the concept via toys. Reju, who runs a travel portal, explains, “Sasha is fond of toys and every time we go out, she buys a new one. Though initially we would give in to her demands, she is now of an age where the value and importance of money can be inculcated. So now every time she demands a toy, we ask her why and what happened to the similar one she already has. We have also taught her that only because we go to work do we get money to buy her toys, and if we don’t, then there is no way to buy all that she wants.” The questions also instil in her a certain sense of responsibility.

Reju further says that how he has now using the most dreaded word that invites tantrums, ‘No’. “Sasha at times when denied something says ‘You are a bad dada’, and though I would normally be hurt, I now say it’s okay even if I am bad, but you aren’t getting it (a toy), because you didn’t take care of the one that you were already given.”

On the other hand, Radha says whenever Vaishnavi asked for something that is not a necessity, she would explain that to her. “Sometimes I try to postpone the purchase just to make her understand how important that particular thing is. This also helps her understand whether it is a want or a need,” she says.

Saving up
Sitara narrates how she set up a piggy bank for her daughter who puts in the change she finds at home or she is given on regular intervals. “Now that she is growing up and when I or Reju tell her we do not have the money to buy her what she wants, she says she has the money in her piggy bank. It has in a certain sense taught her to appreciate the value of the things she has.”

As for Radha, she suggests, “Saving is an important concept which I have taught her. So if she desires to buy something, she starts savings little money to spend it in the future. I am still to teach her the importance of education and money and saving for education. I plan to teach her when she turns 16.”

Tanvi (extreme right) with her two-year-old daughter, parents and sister

Tanvi (extreme right) with her two-year-old daughter, parents and sister

On the other hand, Tanvi Dave, a 29-year-old banker and mother of a two-year-old explains how her father taught her the importance of saving up by setting up a Public Provident Fund for her and her sister at the age of 13. “It was one of the early introduction to managing finances and learning how ‘not spending’ the extra money that I earned via a system called ‘interest’ can help me earn more. It was then that my father introduced the concepts of simple and compound interest which I was learning in school alongside,” Tanvi says.

She also explains that most of her decisions would be based on how to make the most out of the least amount of money I can spend. “I was taught the ‘value’ of money at an early age. I remember as a kid I wanted a cycle, but I was told that I would get it only if I passed my final exams with a certain score and was promoted to the next class. I studied hard and did all it took to get my cycle, and that taught me to use my cycle with care and caution. Moreover, it was also the same time when I was taught by my mother, who is also an LIC (Life Insurance Corporation) agent, the concept of insurance. Although it is not hard cash, I learnt that I could always liquidate the money I have given as premium, when in need.”

Meanwhile, Varsha says, “I guess teenagers understand the value in terms of price factors. Most of them have weekly pocket allowances and therefore, spend accordingly. However, does this translate into understanding its “value”? Not really. They would not hesitate to ask their parents for an iPhone!”

Daily challenges
With the world a global village, and social media taking over teenagers’ lives like never before, Radha notes that there is a need among children to sport branded clothing and accessories, despite knowing to a certain extent how important money is. She says, “Teenagers are very smart and are aware of everything due to social media. But it has also created a lot of peer pressure for using branded products. Though they understand the importance of money, these items have become a necessity for them.”

Varsha addresses the demand among kids for branded goods and says that she has come across several cases where kids demand expensive things like mobile phones and branded clothes as presents. However, she points out that the issue there was that the kids were trying to fit into a system, often out of peer pressure.

She further adds, “It is extremely necessary to have open conversations with the child about finances. A parent needs to keep the child informed through everyday conversations about how money works. It is not something that is a part of everyday conversation, but nevertheless needs to be had at regular intervals so the child is well aware – and that (awareness) should be the purpose of the conversations.” “For instance,” Varsha says, “Explain to them the cost of eating out versus the cost of a home cooked meal. But ensure you don’t come across as complaining about the fact, instead let the children have enough knowledge so they can make informed decisions.”

A.S. Iyer

A.S. Iyer is a freelance journalist who writes about health, wellness, lifestyle and travel. She enjoys telling stories of people she meets along her way and believes herself to be a good listener.