Imagine being in a position wherein you can proudly live your life stress-free, and rest assured that in case of any financial emergency, you can provide the necessary support to yourself, your family, and your loved ones. While this may seem like a massive undertaking, it is far from impossible. The sense of accomplishment that comes with a solid financial foundation and the security that it provides – including being able to stand firm with your family in times of need – is powerful and undeniable. Saving money wisely is an art form and a science, and individuals can benefit immensely from it if they start early.
Money management is an essential aspect of life. Knowing how to spend your money will play a key role in managing your money. It starts right from a young age. When you are young, you should start saving money in a piggy bank or a box whenever you get it. This will be the first stage of your experience in learning how to manage your money. Saving money from an early age helps to build financial discipline. Children will grow to have a better ability to distinguish between a luxurious desire and an actual need.
It will help if you make intelligent decisions in spending money according to your needs. Avoid wasting money on unwanted things. For a longer time, saving your money will benefit you more, as you can buy things which will prove to be helpful to you quickly.
For example, Ram receives monthly pocket money of Rs. 200 from his mother and Rs. 300 from his father. Apart from this, he will also be receiving money from his grandparents and relatives on different occasions. He spends the money on chips, juice, and toys frequently. By the end of the month, he would have spent almost every penny and left with no money.
On the other hand, his younger brother Rahul saves money every month, barely spends his pocket money, and ends up saving a considerable amount of money, which he later uses to buy a cycle.
This is the power of saving money. In the above scenario, Rahul was brilliant because he had the patience to wait, save his money and buy something better. One of the most important lessons learned from the above example is to spend less on unnecessary things and save money for your future use.
As a student, you should always separate your needs and wants as you grow up and be responsible. One should always know how to spend their money wisely.
From a very young age, start saving your money systematically by:
- Saving your money as regularly as possible.
- Make a chart of what you want to buy and its costs, and track your expenses by updating the tracker weekly.
- Save the money in more than one box or piggy bank if you want to buy more or opt for a bigger and better expense for a higher utility product.
- Try spending less on junk foods or avoid spending on them.
In this way, as we grow, we will be responsible for spending our money. Parents should start teaching their children about expenditures, savings, and essential financial aspects. As children, we dream of giving our parents the lives they deserve. It can be achieved given we strive to maintain financial discipline. The money saved right from childhood can come in handy if any unexpected medical or personal emergency comes up. Imagine a scenario wherein a loved one, unfortunately, meets with an accident, and there is a money crunch in the family. You never know, but even the smallest of savings can turn out to be a considerable number and can be contributed to help the needy. This is how parents can make children realize the value of money and potential benefits from savings.
We must no longer consider discussing financial matters with our younger generation as taboo. Learning about finance and savings from a young age will help them practically in their lives.
Financial Education will help the children to teach lifelong values. It will help them become independent and mindful in their actions. Mindfulness is the act of becoming conscious of your decisions. This skill will help them become strong-headed individuals and working professionals in the future, as their choices will be well-considered and analyzed.
Parents can impart an ethos of saving with discipline to their kids in the following ways:
- Please provide them with a place to save their money. Buy them a piggy bank or a box to save their money so they won’t make unnecessary expenditures immediately.
- Teach them to keep track of their expenditure. Ask them to keep a note by writing down their monthly savings and adding the total amount; that will be an eye-opening experience. This will prove to be very useful in the future and prevent them from spending unnecessarily.
- Allow them to earn money by offering small household chores and a small payout. In this way, they will also be more enthusiastic about earnings and savings. This will also teach your children to work, earn money, and be independent without being financially dependent on someone else.
- Set saving goals for your children. Help them decide their purpose to save money and where they will use it. They should know how much to spend, depending on the purpose. For example, if they want to buy a cricket bat that costs Rs.1000 and get Rs.100 as a monthly allowance, then teach them to save money accordingly and how long it will take to save Rs.1500, and when they can buy it.
- Teach them about deficits. In simple words, make sure they never run out of money when they need it the most, due to careless expenditure and wasting money. One should always avoid taking debts for unnecessary luxuries under societal pressure.
- Teach them the difference between wants and needs. They should be taught this at a very young age, as they usually tend to spend money unwantedly beyond their standard of living, negatively impacting them in their future.
- Discuss finances with them as they grow up. Always be open to discussions and nurture an ongoing discussion.
Money management is not an easy task. Those who lack this skill are more likely to end up in sticky financial situations by not managing their money thoughtfully and with consideration. If children are taught about basic financial principles like savings, earnings, expenditure, and the importance of being careful with their money, they will better understand financial management, which will help them in their future.
