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HOW TO INTRODUCE CHILDREN TO MONEY

Children can be introduced to money as soon as they learn to count. For eg: Instead of giving a ten-rupee note to children, 10 one-rupee coins can be given to them. Without realizing, the child will learn about money. Another simple way could be to give a money abacus to children – which have rupee denominations. While learning to count, toddlers will get initiated into the world of money.

Once children are 6-7 years old, they can be explained details through money games. Gift children the game of monopoly and regularly play the same with them. It will introduce them to the world of money in a fun manner.

Parents can start talking about money to children explicitly once they are old enough to start asking for regular money to spend either at school or with friends. Often, parents feel pressurized to give pocket money to their children since children from other families get the same. However, the format in which money is given need not necessarily be ‘pocket money’; it could be on need – basis as long as it is closely monitored & is in limited amounts.

There are several other ways in which parents can teach their children about money:

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Parents can gift a 'piggy bank' to children and ask them to collect all the money that they get as gifts, prizes, etc. The child will be very excited with the thought of having 'his/her own money' and will also passively learn the concept of 'saving'.
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Children can be read bed-time stories about barter i.e. how in earlier times, money did not exist and people used to exchange goods between one another to fulfil their needs. For eg: if I had an egg and wanted an orange, which someone else had, the two could be exchanged in return for each other. However as people evolved, their needs grew bigger and the system of barter stopped suiting. This is when money came into being. Money gave freedom to people to buy whatever they wanted in exchange for money.
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Children stories can also revolve around the various formats of money & how it differs across different countries.
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Children can be give a certain amount of fixed pocket money to take care of some of their expenses which can be defined by the parents. For eg: If your daughter/ son likes to buy candies at school randomly as well as story books/ comics regularly and you wish to control the same, advise them to use their pocket money for these purposes and ensure that they do not spend the entire amount in one go!
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Take the children to a super market kind of place and ask them to pick up things that are of interest to them. Once they have indulged in picking the goods of their choice, explain to them how they should compare prices of goods before taking a decision. For eg: if your daughter has picked up two different kinds of pencil boxes with similar features and prices differ, explain the benefit of the pencil box and convince her to take the cheaper pencil box. However, remember to not impose the decision on her without adequate convincing else you will return home with a wailing child!
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Once the child starts going to school, parents can open a savings account in the name of the child. Some banks in India now have a specially designed banking package for children. Eg: the Citibank Junior package. Parents can regularly put in some amount of money in the child's account. Whenever the child will get account statements, he/she will be extremely excited to get a letter in his/her name. Through the statement, parents can easily explain the concept of interest to children.
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Ask children to draw & paint what they want to become in the future. Discuss plans on what all is required to ensure that children achieve their dreams. For eg: if your son says that he want to do an MBA in the US, you can discuss how he needs to excel in his academics from the beginning as well as extra-curricular activities so that he can be a contender to the prestigious scholarships for these institutions. He may not realize why you are discussing the same with him at that tender age, but as he grows, he will slowly start appreciating what you had discussed with him. Not only will he understand that these institutions are expensive and scholarship is essential, but it will also drive him to excel in his curriculum.