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Children's Day Special: Simple Ways to Inculcate Saving Habits

Kids and children are like curious sponges. They have an inquisitive mind and love to imitate their parents. Images of girls trying on their mom’s lipsticks and boys trying to shave show us how kids can’t wait to grow up. And one of the grown-up things that form a part and parcel of the adult world is managing money.

Managing money isn’t something that we can learn in one day. We have to undergo various trials and errors before we can arrive at an optimal solution. Cultivating good money and savings habits from student life can help to ease into the field of managing money as an adult.

Parents play a significant role in teaching good money habits to their children. This children’s day, we give some ideas on how to help your kids cultivate saving habits.

Let them understand the value of money

To become responsible adults, kids need to understand the value of money. Giving whatever kids want is a sure shot way to spoil your kids with riches.

Instead of buying the gift, let them save enough money to buy their gift themselves. Teach them the importance of savings and how they can build their required target amount by saving.  

As kids receive pocket money as well as cash from their relatives, it will help them to save for their goal. This teaches them two important financial lessons at one go. The first lesson is the value of money and the second lesson is that planning makes everything attainable.

Gift them a clear piggy bank where they can save their money and see the piggy bank get filled up. As kids can see the money getting collected in the piggy bank, they will be incentivised to save more.

Open a kid’s savings account

Nowadays, banks offer different kinds of savings accounts. Kids savings account and children savings account are exclusively meant for children. Kids savings account are bank accounts meant for kids below the age of 10 and children’s savings account can be made for children between 10 to 18 years. For kids below 10 years, a savings account can be jointly operated by the kids and parents while children can have the savings account in their name after they attain 10 years.

Depending on the age of your kid, you can open a savings account. The savings account will help your kids to build a savings habit and at the same time, they can track their savings. They also become familiar with the banking operations from an early age which builds their confidence in handling various financial products as financial products.   

Children above 10 years of age can also have their debit card which can help them to shop at retail and online stores.

Focus on the goal: Earn More or Spend Less 

There are two ways to have more money. Either one can earn more or spend less. Children also need to understand this as soon as possible. E.g., if they are eyeing for a particular gadget, parents can tell them the two ways that will help them to expedite the process.

Children will now be more willing to help with the household chores as they know that doing their share will allow them to have more money. At the same time, it may also curb their spending and help them focus on what they want.

This will help them to prioritise their financial goals in their adult life and achieve it seamlessly. Net banking, phone banking are some of the facilities that are available for savings account customers. Parents and kids can easily track spending through net banking.  

Teach them about the different financial products 

Different financial products aim to cater to the different financial needs of people. It is always better to start with the simplest saving product. Recurring deposits(RD) and fixed deposits (FD) or term deposits (TD) are some of the products. Banks also offer special recurring account and fixed deposit for kids to develop savings habits and help parents to save for their kid’s education.

Parents can teach their kids about these deposits and how it may help them to fulfil their financial goals.

Conclusion: Inculcating good money habits is important. It helps kids to understand the value of money and how they can work forward towards their financial goals. Kid’s Savings account, children recurring account and fixed deposits are some of the financial solutions that will help your kid be financially literate.

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