Source/Contribution by : NJ Publications
Schools will soon be closing for summer vacations, and we don't want our kids to kill their time and strain their eyes watching TV, or pestering their grandparents all day. So, most parents would be contemplating to send their kids for dance, music or painting classes, or may be enroll them for summer camps, or for vedic maths or abacus classes to advance their number skills. We want them to do something concrete, to keep them occupied, while they pursue a hobby or build their extra curricular skills or social skills. However seldom we would touch upon their financial management skills.
Vacations is a good time to introduce your kids to money skills and in fact setting the path for growing of a financially savvy individual. We have listed down some activities that may be helpful in putting the vacations to some constructive use.
Teach the money cycle: The rudiments of financial literacy lies in the money cycle: 1. Inflow of money 2. Spending 3. Saving. This summer, the first thing you can do is explain the concept and elements of the money cycle to your kids. To secure your child's interest, you can use various techniques for making learning more fun for the kids. You can engage them in a daily activity like cleaning their room, or watering the plants, or reading a book and attach an allowance on completion of the activity. You can also give them an allowance on special occasions like participating in a marathon, or helping mum in the kitchen if guests arrive, or for eating spinach in dinner, and the like. Also you must keep in mind, that you give them only as much allowance as you mutually agreed initially, stick to your policy, don't fall for those cute faces, 5 Rs for cleaning the room, so be it 5 only. Next ask them to write their goals, like what are they planning to buy from the money they get, at the end of the holidays. Guide them in developing their savings plan so that they can have enough money to fulfill their goal. You must continuously monitor their finances, and poke them if they are overspending. These activities are thrilling, kids will be motivated to work hard for more allowances and saving from their allowance since it is taking them closer to the their military gun, or a pair of skates, or whatever the goal is.
Make them your grocery shopping partners: Whenever you go for grocery shopping, take them along. Involve them in shopping, familiarize them with the information printed on the package and that it should be checked before buying the product, like MRP, expiry date, etc., let them check the price of each product you pick and also of the alternate products that you skip. They'll get an idea about the price of the products that are consumed in the house, the price difference between a Ferrero Rocher and a Dairy Milk chocolate, the effective cost of the product if you purchase combo packs, etc. At the end of the shopping, ask the kids to crosscheck the bill with the items purchased.
Keep them involved in the entire shopping process. This activity will give them practical exposure, it will teach them that things come for a price and will inculcate prudence from a young age.
Teach them entrepreneurial skills: Vacation is also an opportunity to let your kids taste business skills. The kids can set up a stall like a golgappa stall, or a sandwich stall, or a candle stall in any event that's happening around, like your society or a fete or a mall, etc. Let them do the purchase of the raw material, processing of the product, setting the price of the product, do sales, etc. The level of responsibility should depend upon the age of the kid. At the end of the day, if they manage to make a profit, it shall be deposited into their piggy bank or their saving account. This exercise will help them experience the thrill of business process, it'll be their first steps to learning business sense.
Money Games: There are a plethora of money games available for different age groups of kids in the market, on various subjects like stock exchange, piggy banks, business, saving, setting of goals and working towards them, etc. Kids have an appetite for games, a fun and engaging money game can be a good way to capture their interest and inculcate financial instinct among your young ones. You can research a bit and then buy few good money games for them in this vacation.
Gone are the days when kids were excluded from all financial discussions of the house, today parents make an effort to make their kids financially aware, so that when they enter into the mature world, they are not at point zero because the first thing they are going to face is money. So, this summer vacation, carve out some space for financial literacy from their activity schedule.