By Purva Aggarwal, Founder of Good Good Piggy, an Ed-Fintech Company, featured on Shark Tank India
Pocket money and piggy banks have been used for years to impress upon the children the importance of managing money. However, this practice is usually done with teenagers and with very little to support this learning. Children learn about the transaction value of money very early on in their lives. So why do parents wait to teach them about money? The age-old argument about preserving their innocence doesn’t quite cut it. They’re already learning about money from their environment, if not implicitly. By introducing the topic, parents are not taking away any innocence but providing context to what they are already seeing all around them.
There are many reasons why parents should address this topic early on, like the following:
- Understanding of Consequences
Children need to learn that not only does money have value to buy things but there are financial consequences to all spending decisions. This is a crucial part of their development.
- Decision making
Children at an early age learn the art of decision-making. This affects them in every sphere of life and is set at an early age. It would be helpful to guide this learning when the child is impressionable and still developing these core habits.
- Understanding the value of work
Children need to understand that nothing comes free. The things they buy and the gifts they get are results of hard work, not handouts from an ATM.
- Delayed gratification and impulse control
These values are very important in anyone’s life. They affect all types of decision-making and can cause severe life changes. Hence, the need to enforce these values early on and set the right foundation for the future.
Many parents feel like this conversation is too stressful to bring up with their little ones. However, this stress is felt by the adults who are struggling with the issue, not the child intent on learning everything about the world around them.
Money is an integral part of life that affords us the right education, a good environment, and social security. Therefore, money management is not a life skill that should be ignored or put off. So when is the right time to start impressing the right values about money? Right when a child stops putting it in their mouth!