Imagine this: at the family dinner, while discussing how to spend the weekend, the 12-year-old jumps in to suggest going to the water park. “I have saved enough from my pocket money!” It’s not just a cute moment, but also a glimpse of how effectively early financial education can process disciplined behaviour.
In today’s day and age, inflation seems to be playing a match with no end in sight, while peer pressure can often make kids feel like they’re on the losing team. Founder of Finsafe India and Financial Educator, Mrin Agarwal, emphasises the importance of financial education, saying, “Starting these conversations early helps children understand the of money and build a strong foundation for managing finances.”
Giving kids pocket money isn’t just about handing out cash—it’s about teaching responsibility. Ruchi Kothari, a mother of one, says that she has a specific amount that her 12-year-old daughter can spend on books or toys of her choice, and if she manages to save a minimum amount every month, she incentivises her with a reward. “I match whatever she has saved for three months, and then we go shopping together. So it teaches her about saving and returns, along with having regular mother-daughter day outs,” she said, smiling.
As kids grow, so should their financial responsibilities. “By the time they go to college, give them a monthly budget and let them manage it. It teaches financial responsibility without unlimited spending,” Agarwal said. It becomes easier for them to understand expenses that they can compromise on and ones that they can’t, she said.
Saying ‘no’ to financial requests isn’t easy, but it’s essential for teaching kids about financial boundaries. At an age where kids see peers have the latest gadgets or even trendy clothes, it’s only natural for them to want the same.
“Being the bad cop is necessary at times, but now that they’re adults, they understand why I always asked them to rethink their wants multiple times and say no to ones that were a mere three-day serotonin boost to them,” says Ravi Prakash, a father of two.
Agarwal suggests being firm about budget limits: “If they learn to manage during tough times, they’ll develop crucial life skills.”
Break the taboo around money by integrating financial discussions into daily life. Adding real-life situations to their compound interest homework can be a good start, Agarwal said. “Discuss financial decisions openly, whether it’s planning for insurance policies, education costs, or even managing wedding expenses. Practical examples make financial literacy more relatable,” she said.
By starting these conversations early and as normal as dinner table chatter, keeping them engaging, and gradually giving kids more financial independence, parents can help their children become responsible adults. “It’s about equipping kids with the tools they need to handle money wisely and feel confident making those decisions,” Agarwal said.
So, next time you’re discussing weekend plans or shopping choices, remember—it’s not just a chat; it’s an opportunity to make your kids just a little more financially responsible.
