The year is 2023, and the world has moved into this rapid age of digitalization substantially faster than expected. From payments to banking, everything is being performed digitally, making life so much more convenient.
From school, until the time children grow up and earn their own money, they are never taught how to manage finances or manage money. It is something they learn as they grow, and most of the kids coming out from Indian families have the same story. And none of this is taught in schools.
Teach kids the 50/30/20 Rule
This rule budgets money based on the following percentages: 50 per cent for necessary expenses, 30 per cent for other expenses, and 20 per cent for savings. These percentages can be altered to fit all of your needs, and if you don’t have a lot of expenses, the surplus money can be contributed towards savings.
Breaking the Stereotype
Pocket Money has been a topic of debate over the past few years about whether or not a child should receive a fixed allowance on a regular basis.
5 Reasons supporting the need for pocket money online for a teenager:
1- It is important as it polishes their monetary skills by enabling them, from a young age, to practice:
a) Savings
b) Budgeting
c) Spending
2- It helps a child start off by setting mini-financial goals for their purchases such as their dream shoes or an electronic gadget. This habit, then helps them begin saving for the future, eg: purchasing a vehicle post-schooling, saving for college tuition, etc.
3- It makes teens responsible for their actions, as money management teaches various skills such as decision-making, budgeting, working with fewer resources, etc.
4- It plays a crucial role at a later stage when the child is grown-up and starts earning money of their own. It builds confidence as the child has already been managing finances from a young age, so they are familiar with the concept of successful money management when the time comes.
5- It provides teens with the opportunity of keeping a track of their spending which is a great insight. This newfound insight helps them have more control of their money and budget it wisely.
We all have fond memories of receiving extra amounts on special occasions which would prompt elders to quickly caution us to not spend it all at once. This holds true in all aspects of life. Children should be aware of their spending and must keep a track of it to become financially sound and healthy when it comes to managing their money. Children’s debit card is designed to inculcate some confidence in kids when it comes to handling money and savings.
Everyone needs to learn the fundamentals of managing money. Money management skills are essential life lessons for children to learn from their parents.
Children have a greater capacity for learning and understanding. So, parents can help their kids become more responsible with their money by having open conversations with them.
It can be a big leap towards financial self-sufficiency and independence when done at a young age.
Encouraging children to save money in a variety of ways will help them inculcate the practice of money
management from an early age. Several tools and various pocket money apps exist to help kids become financially self-sufficient. When it comes to saving and giving, younger children can choose piggy banks or envelopes, while older kids can open bank accounts.
Kids need to get into the habit of putting away some of their monthly pocket money for some goals.
They can work together to plan for things like saving up for an emergency purchase. Children will be better prepared for financial success in the long run if they develop healthy financial habits early on.
Gamification is one method that can be used to instruct individuals on the proper handling of money. For those who don’t know what “gamification” means, it’s a method that uses challenges, competitions, and rewards to encourage certain behaviours or teach lessons.
In conclusion, developing healthy financial habits is no more a luxury but rather a necessity in today’s society. Maintaining financial stability requires careful financial planning, and this is especially true during trying times like these. Getting a head start on your kids early in life can make it easier for them to attain life goals and get through difficult times with ease.