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Teach your kids to be financially responsible

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Incorporating financial literacy in your kid’s curriculum is as important as academic knowledge, morals and values. While financial literacy is something that comes along the way as children grow, you can always instil the idea of financial responsibility at an early stage.

It all boils down to how interestingly and cleverly you convey the message when it comes to children. It doesn’t always have to be a fun exercise – kids unknowingly pick up many of your habits, so be the change you want to see in them.

As much as all parents wish, kids don’t come with an instruction manual. But we can try and test different methods to inculcate a sense of responsibility in them – informed kids become responsible adults.

Read on to learn more about how to raise your kids to be financially level-headed.

The importance of being financially responsible 

Being money literate and financially responsible is a crucial life skill that parents need to include in the learning curve. The first step towards this could be by teaching them the value of money.

Money is the fuel that supports the engine of life. We as adults are well-acquainted with the concept of ‘cost’ of spending, but children aren’t. For a child, the idea of money and cost is as foreign as neuroscience simply because they cannot see the cost of things.

Children aren’t a part of what goes on backstage – they see a full fridge, a bunch of toys, occasional gifts, and gadgets. They’re unfamiliar with the effort that goes on behind the scenes to give them a comfortable life.

For children, these things exist – they don’t know that they could be wasting something at an expense. On the contrary, parents pull all-nighters, create a budget, pay bills, and plan trips on a budget.

And this is the root of all problems – kids are far too unfamiliar with money to realise the importance of financial planning in their lives. Parents can undoubtedly take baby steps to introduce their kids to the idea of money.

If you don’t teach your child the importance of money, then life will; life can be a relentless teacher.

Risks of skipping the money talk

The following shows how skipping the money talk can impact your child’s future:

  • Financial dependence: The lack of proper financial guidance could affect your child’s money management skills, eventually leading to unhealthy economic reliance on you.
  • Lack of confidence: Kids who’ve never handled money on their own could grow up to be adults lacking the confidence to make sound financial decisions.
  • Uncontrolled debt: Failing to set reasonable financial goals, a budget and a savings fund could lead to a heap of unmanaged debt if your kids don’t realise the value of money.
  • Pernicious values: Kids take after their parents, and if you exhibit an unhealthy relationship with money, your kids might grow up to do the same. They might start associating money with self-worth and develop unhealthy materialism.
  • Conflict: Financial disputes and conflict have the potential to tear families apart. You need to impart solid values and patience to your kids when it comes to money matters so that they can calmly deal with financial tensions.

Ways to teach kids to be financially responsible.

  • Start early and take baby steps: Parents should ideally start introducing the concept of money before their child turns seven. You could start by explaining to them what money is and showing them how it works – simple things like buying groceries, toys, fast food in exchange for money.
  • Inculcate the habit of saving: Once you acquaint your kid with the concept of money, the next step would involve teaching them the idea of saving money. Demonstrate responsible financial behaviour, which teaches your kids that money isn’t just for spending. Saving is a great way to discipline your child. You could give them a piggy bank of their own where they could get a savings jar to deposit their coins and cash. Encourage them to save by using positive phrases such as ‘saving is a good habit’ or ‘saving makes me feel good. Alternatively, save with them.
  • Create earning opportunities: Teaching your kid how to save is a relatively more straightforward task, but the more challenging and more important thing is to teach them how to make financial decisions. Creating earning opportunities for your child could help you accomplish this goal. You could maybe give them a weekly allowance to gauge their response or pay them for helping you with household chores (gardening, organising, etc.). Having a limited sum of money will force them to choose – which is the key lesson here.
  • Teach your kids gratitude and generosity: Practicing gratitude can be instrumental in balancing the anxiety associated with money. Begin daily gratitude practise with your kids – as a family, you could share five things you’re grateful for. This practice may not directly relate to money, but it certainly cultivates patience and acknowledgement in your kids. It helps move their attention from what they don’t want and deviates them from thinking about scarcity.


Money woes usually don’t exist in isolation. Your kids can always apply financial lessons to their social life. Money impacts values, relationships, choices and self-esteem in more ways than we can imagine.

You can donate the money you spend on trivial things in life to charity. Similarly, instead of giving into your child’s unreasonable demands, you should encourage them to earn money from chores. Doing this will enable your child to become accountable for their choices. Who knows, they might give up the bag of crisps to save up for a bicycle.

Broaden your child’s horizon and secure their future by teaching them about saving, earning and spending money.