Of saving habits in kids
Guide your children to reap the benefits of financial world
independently for their bright and prosperous future.
SAJJAD ‑ BAZAZ
Most of us are well aware of the importance of financial planning to realise our goals for prosperity.
However, most of the time we forget to pass on some les- sons of financial planning to our children to help them to create a saving and spending plan towards their sound financial future. In today’s time, when we incur lot of expenditure on our child’s education, it’s at the same time inevitable for us as parents to ignore money manage- ment lessons to our kids. What I mean to say is that we need to give the power to our children to decide how much to save and how much to spend. Of course, this basic financial em- powerment in making adult deci- sions would be exercised under your umbrella. Let me make a bit of more clarification here that giving power of financial planning to kids is to incul- cate good saving habit among them. So the mantra is to teach the kids to save and then spend out of this savings Where from a child would get mon- ey to save? Of course, money doesn’t grow on trees. Besides, a child is not an earning hand.
So, the main funding source for the kids to save is their parents. It’s basically the pocket money, a sort of daily allowance, which parents give to their children. And it is here the parents can get started and as a first step have their child dedicate a por- tion of the pocket money to saving and a portion to spending. As far as spending part is concerned, we as parents should least interfere in how our kids spend money. How- ever, the interference should be to the extent of pointing out to the kid that money once spent won’t come back to his or her kitty.
The most important part of money management skills is inculcating sav- ing habit among the kids. And it’s not an easy task to motivate children to cut down a portion of pocket money – exclusively given to them for spending – and save. Explaining the importance of saving with a motivational force is a challenge and don’t be surprised when your child asks you why he should save money. It is not a one day’s job to con- vince your child to cut down spending out of your daily allowance. Discuss with your child the importance of sav- ing for the future and spending it to achieve goals for living a prosperous life.
As a parent you should remember that nurturing habitual saving in your child is more important than his or her monetary progress. Now, most important question what method should be adopted to help your children to save? After the child is con- vinced to bifurcate his or her pocket money or daily allowance, the saving portion has to be parked somewhere? The saved money should not only be in safe hands, but it should over a period of time also multiply. In our childhood, our parents would gift us money box or coin box to lure us towards saving. We have these money boxes even today. Our children too make use of these boxes to save, but for fun. They don’t seem attracted to this concept of saving money. We have to make use of modern ways of luring our children to save and at the same time expose them to the excitement of earning on their savings. So, the best mode to attract your kids towards sav- ing concept is to guide them to have a savings bank account.
The amazing part of savings bank account is that an account holder automatically gets eli- gible to get an ATM/ debit card. Your kid having an ATM card in his pocket will feel financial empowerment. J&K Bank has recently introduced “Student Savings Bank Account”. Even you can open an account for a KG stu- dent under the scheme with initial deposit of Rs.50. There is no need to maintain minimum balance, which means that the account can run even with zero balance. Debit Card/ATM Card (For Students above the age of 10 years are eligible to get a debit/ATM card free. Cheque book of 20 leaves for one year shall be issued to students above age of 18 years free of cost. Even e-banking and SMS alert facil- ity can be availed by the students once they open a savings bank account.
The bank shall not be charging for these services. So, you should visit your bank along with your children to open a savings bankaccount for him. A visit to a bank branch will infuse a dose of confi- dence, excitement and magical em- powerment in the children. Explain that a bank is a place you put your money until you need it. Let the bank official on the desk explain about the account and its benefits. Your child’s involvement in the account opening process will definitely be a source of excitement for your child. In succinct, guide your children to reap the ben- efits of financial world independently for their bright and prosperous future.