LFL # 36 => Kids and Finance: When do we start?

One day, my spouse and I were discussing how we could impart our knowledge and lessons learnt throughout our lives to our children. We debated on a variety of topics and the first seed of thought was finance. As we both came from middle-class families, finance was a hot topic in our home where the elders tried their level best to make ends meet with limited resources. My brother and I learnt some aspects of managing finance by reading and talking to people, whereas my spouse was dependent on her sister for advice and had limited knowledge on how to manage what she earned every year.

Now the next challenge was how to train our children and what the appropriate age was to start this exercise. As we were mulling over this thought process, we happened to visit Aunty Sybil. We were both awestruck with her approach of embedding her children with the culture of having great value for finance and teaching them the basics of finance at such a young age.

I asked my aunt, “How and when did you start training your boys?”

She replied, “Well, they better know that money does not grow on trees and we have to work hard for it. The earlier they learn this, its better for them”. Then she explained how she taught her boys to calculate the household expenses and match it against their family income.

Armed with this knowledge we arrived home and started planning steps on how we should introduce this topic to our children. By the age of 8 years, they were well versed with the Internet. So, we started teaching them MS-Office and how to research different topics, as they would be using that skill at some point in their career and education. First, we collected all the credit card and debit card receipts, created an expense spreadsheet and showed them how to enter data into an excel file. On a side note, we also taught them how to scan each receipt and save it for reference by giving them appropriate names and arranging them in specific folders for that specific year. It was tough in the beginning as there were errors in data entry but we were patient and kept encouraging them to continue. We also kept a log of all other household expenses and merging all data into one spreadsheet. Then, we started talking about how our income was distributed to paying for our needs and how we kept aside a portion for our dream expenses.

We experienced the benefits of this exercise when we went grocery shopping as well as making purchases for different products during the year. There were times when we decided to make a purchase and they would question us if it was really required? The narration of the story changed because we no longer had to justify our action, as they started self-learning and commenced the elimination process and also realized the importance of savings for education.

After a few years, my girls approached me in the kitchen and said, “Thank you.” I was busy doing some work and looked up with a question in my eyes. I was wondering what was cooking in their mind and they replied, “Well, when we talk to our friends, at this point in time, none of them has any idea about finance and how to manage it. My friends look up to me when we speak of finance and general things with so much knowledge. We are very lucky to have you as our dad and for teaching us the value of money. We will do our best and I promise to impart this knowledge to the next generation as well.”

CA-GL-08/18/18

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