Every parent seeks the bright future of their children. As a parent you will never wish to lag behind when it is about to shield your child from future difficulties. Whether it is about educating your child for a better future, or preparing him in terms of financial decisions, everyone wants their children to be able to learn as much as possible. Teaching your child about basic money matters can help them a lot to be able to face future challenges.
If you are teaching your kids the importance of money/basics of finances, you are laying the foundation of their bright future. Encourage them to start saving at the early stage of life, and discuss the power of compounding.
Here are some Smart things to share:
#Start early
The sooner you start, the better outcome you will get. If you don’t want your child to fall into the traps of the financial world, then you have to train him to learn tactics of finances and learn the importance of saving.
Tell your child the basics of money, discuss the importance of money, and the reason why one needs to be decisive with its usage. The more you will help them understand the cost of materialistic things spread over the surroundings, the better financial decision will inculcate in them.
Slowly and steadily depending upon the knowledge, you should teach them the value of money, inflation effects, importance of savings and ways to grow and invest in money.
#Monitor Regularly
In countries like India even adults don’t feel themselves organized about finances. Keeping track of incoming and outgoing expenses is the first step ladder for better financial planning. Make it a daily habit of your child to pen down his/her daily expenses. As soon the child gets older, give him charge of a certain portion of household finances like grocery, electricity, etc.
#Always Save
Money saved is money earned, imbibe the habit to save early in life. Teach them the 50-30-20 budgeting rule that describes that 50% of the income should be utilized for necessities, 30% for income, 30% for long term goals, and 20% should be splurge for lifestyle needs.
#Reap Benefits
While inculcating the habits of savings, don’t hesitate to let your kids understand the reaping the benefits of these investments and savings. Let them enjoy using the money to accomplish their aspirations once they achieve a milestone.
#Tax Savings
Don’t forget to teach your children the concept of taxes, and how it helps in nation building. With proper savings and investments, they get an opportunity to take benefits from multiple tax deductions for a long run. Share your details of life insurance policy and health insurance, and how they help saving thousands of rupees in taxes.
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