Bina
Mukerjee has been investing regularly for her child, who is now 11
years old. She has begun involving him in the investments, and he knows
that he can set aside his birthday gifts and token money received during
festivals. Mukerjee wants to know how she can cultivate his interest
and increase his involvement in saving for his future. How should she
approach the matter?
The primary lesson that children need to learn about money is that it is a limited resource and, hence, has opportunity costs. The decisions they make as adults will depend largely on how they make these choices at an early age. Mukerjee should try to get her son to make these decisions consciously. She should be able to link the choices made in the present to the goals in the future so that she can develop the emotional intelligence that arises from dealing with instant gratification.
Reckless spending and borrowing usually take place when children are led to believe that money is an unlimited resource. Even if parents think they need to indulge the children and not make simple decisions lean on the money involved, they should bring in the idea of making meaningful choices. Mukerjee should associate the spending choices made by her son to the value it has for him.
For instance, before ordering from the menu and wasting food after tasting it, Mukerjee can let her son make a choice, but make sure that he doesn't order again without eating what he has ordered. These habits help kids appreciate that money is a limited resource.
Mukerjee has moved beyond the simple ideas of a piggy bank and saving from pocket money. She has begun to treat her child as a young and responsible person, who works with his parents to build his corpus. The small amount that he puts in today will grow into bigger sums when he is ready.
The primary lesson that children need to learn about money is that it is a limited resource and, hence, has opportunity costs. The decisions they make as adults will depend largely on how they make these choices at an early age. Mukerjee should try to get her son to make these decisions consciously. She should be able to link the choices made in the present to the goals in the future so that she can develop the emotional intelligence that arises from dealing with instant gratification.
Reckless spending and borrowing usually take place when children are led to believe that money is an unlimited resource. Even if parents think they need to indulge the children and not make simple decisions lean on the money involved, they should bring in the idea of making meaningful choices. Mukerjee should associate the spending choices made by her son to the value it has for him.
For instance, before ordering from the menu and wasting food after tasting it, Mukerjee can let her son make a choice, but make sure that he doesn't order again without eating what he has ordered. These habits help kids appreciate that money is a limited resource.
Mukerjee has moved beyond the simple ideas of a piggy bank and saving from pocket money. She has begun to treat her child as a young and responsible person, who works with his parents to build his corpus. The small amount that he puts in today will grow into bigger sums when he is ready.
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