Build Strong Money Habits to Children - Learn Dignity of Labor and Habit of Saving

Teaching financial literacy to the next generation is incredibly valuable. 

In today's world, teaching children the habit of saving from an early age is a matter of great importance. To build a strong financial foundation, they must be prepared for it right from their childhood. Here are some meaningful ways to train children on how to manage and save money from an early age.

If children practice these habits, or if we train them properly, we can witness wonderful changes in them. Moreover, it will help them develop a unique and independent personality very quickly.

In my opinion, it is best to implement these steps by dividing children into three groups. The first group consists of children aged 5 to 10, the second is 11 to 16, and the third covers saving methods suitable for those aged 17 to 21.

Remember, this is not just theory. These are well-thought-out plans that I have personally developed, implemented, and seen succeed. I am sharing them here for your knowledge so that you too can implement them and achieve success.

Ages 5 to 10

This period can be described as the beginning of the school years. At this stage, children shouldn't necessarily be taught the complex value of money, but rather the concept that money is required to obtain things. Children in this age group are usually more interested in chocolates and coloring books than the cash itself. The goal here is to foster the mindset that money is essential to acquire these items.

At this age, it is difficult to explain the economic value of money or how it is earned. Instead, give them a small piggy bank as a gift. When they get good marks in school, help out at home, or do something positive, give them small amounts of money and ask them to deposit it in their piggy bank. At the end of the month, take them to the store with that money to buy their favorite chocolate, toy, or book. Telling them, "This is the money you earned," will unconsciously instill the thought that their savings will benefit them later.

Ages 11 to 16

This is the most crucial time to create a genuine inclination toward saving. You can provide small cash rewards for doing well in studies or helping parents with household chores. Since education is the priority, you can offer a slightly higher amount when they pass exams with high marks. This is the best age to train them to earn money according to your guidance.

You can also buy them excellent books. Once they finish reading, ask them questions to ensure they have read with focus. For every book they complete, you can reward them with a decent amount. This is a great opportunity because they aren't just gaining knowledge; they are also acquiring the skill of earning.

These are just a few examples. Parents can implement this in ways that suit them. However, it is essential to monitor how children spend the money they earn. In my view, this is the time to root the habit of saving by understanding the precise use of money.

Ages 17 to 21

I see this as a vital time to teach the value of both saving and investing. At this age, children truly understand money and the security and freedom it provides.

That knowledge should be utilized here. You can teach them methods to save more. Opening savings accounts and letting them handle transactions under your supervision will provide them with excellent training and knowledge during this period.

A mistake many parents make is giving children "pocket money" every month. In my opinion, this should be avoided because money received for free often has no perceived value. Let me clarify this with a good example:

"Once, a father called his college-going son and gave him a silver coin, telling him to throw it into a nearby well. The son did as he was told. This was repeated for several days. Each time, the father gave a coin, and the son threw it into the well.

One day, the father said, 'I have some work for you; if you do it, I will give you a silver coin.' The son agreed. After finishing the work, the father gave him a silver coin and said, 'Now, go throw this into the well.'

To the father’s surprise, the son angrily refused. He said, 'I cannot do that. I worked from morning till now to earn this. I will not throw it away.' That was exactly what the father wanted. He was teaching his son the dignity of labor, the value of money, and the benefits of saving." 

This story teaches us that "unearned money is undervalued"

You can do the same. Encourage your children by giving cash rewards when they top their exams, win prizes in arts and cultural activities, read good books, or perform household tasks well.

What I do is this: when exams approach, I offer 100 rupees per subject where they score above 60%, 200 rupees for above 80%, and 300 rupees for 90% and above. This motivates them to study well and understand the necessity of saving to achieve their needs later.

I also have a habit of giving 1,000 rupees for every good book they finish reading. Additionally, providing rewards for chores they do without being forced—such as changing bed sheets, mopping the floor, or keeping furniture and rooms clean—is excellent for teaching them the dignity of labor and the need to save.

Parents who give children money out of pure affection the moment they ask should remember that they may regret it in the future.

From age 21 onward, children should learn, or be taught, about investment methods. I will write about that as a separate topic soon.

Conclusion

Parents can adapt all the above methods to fit their own style. The ultimate goal is to instill the dignity of labor, the importance of education and knowledge, and the habit of saving. "Remember, this subject is very vast. Therefore, only the most important points have been written here."

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