‘Financial education’ or the ‘art of spending wisely and saving adequately’ is a notion acutely missing in our children’s personal and academic education. What’s important to note is that this practice should be encouraged in EVERY household, irrespective of the household’s income or whether there is an impending need to save or not.
Here are a few handy tips which can be implemented with little effort.
Encourage children to ‘choose’ wisely
Be it a toy, dining out, grocery shopping, fun-filled activities or popcorn at the movies, encourage your children to choose everything in life wisely and economically. Instead of multiple kids’ meals at a fast-food joint, kids can club together and buy a family value meal.
Teach kids the art of monthly saving
Piggy banking is back with a bang. Buy one for your younger kids while encouraging your teenagers to open a savings account and monitor their monthly saving practices (here are just a few of the savings accounts in the UAE targeted towards children: First Step Savings Account from National Bank of Abu Dhabi, Al Ahbab Account from Union National Bank, and Banoons Childrens Savings Account from Abu Dhabi Islamic Bank). It is unwise to hand over total financial responsibility to a teenager, but with parental guidance, this proves to be an especially valuable practice for university or college life.
Malls DO NOT MEAN shopping
Dubai is a paradise for shoppers and mall-goers with amazing discounts year-round, but going to a mall should not mean walking out with heavy bags every time. Kids must understand that shopping malls can be visited for recreational purposes, dining or simply window-shopping.
Every penny’s worth
Don’t gift a smartphone to an 8 or 9 year old just because you can afford to. If your child desires a special ‘gift’ without any coinciding event (birthdays, festivals or school results), advise them to save up for their requirements. Ask them to stash away a portion of their pocket money each month and then buy that special ‘gift’. Not only will they value their possession more, but the process will give them a sense of accomplishment and pride.
Let your child make mistakes now
As a parent, don’t be afraid to let your child learn by making mistakes. For example, instead of paying for their haircuts, clothes and school-related accessories, increase their monthly allowance and let them pay for it themselves. Failures early on in life provide important lessons at a relatively small cost.
Reward them for saving money
Encourage your child to save by matching their savings or offering rewards or prizes if they reach certain milestones.
Encourage schools to offer financial education
Parents should advise schools on imparting financial tips in the forms of lectures, seminars and workshops to children. Working with other children goes a long way in helping students learn.