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9 money lessons to teach your children

Start before it is too late

Start before it is too late

Educate your children about money matters before it is too late. Teach them these 9 money lessons to make sure they grow up to become financially responsible adults.

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Child's money attitude is shaped by family

Child's money attitude is shaped by family

If you have been the type of person who considers the merit of every financial decision and deliberates a lot, chances are that your children would have picked it up as well. Consider your money habits as a family, so you know what to expect from the children you have sent to college.

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Money does not grow on trees

Money does not grow on trees

The single-most important money lesson to learn early is that it is but a limited resource, and even if you had plenty it always comes with alternative uses. Agree on a monthly allowance and stick to it. Make sure you have a good idea of all the other costs for books, memberships, travel and other big-ticket items and provide for it in advance.

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Make budgeting a joint affair

Make budgeting a joint affair

Budgeting should be a family affair in which your child agrees on how much will be spent and on what. Make it an exercise of assessment of the cost of living, including mandatory and discretionary expenses. If your child wants other little luxuries encourage taking on part-time work.

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Teach them about financial transactions

Teach them about financial transactions

Teach them how to make electronic transactions, how to keep the account secure, how to manage an electronic wallet, and minimise the use of cash so that accounting becomes easy. Ask for the accounts to be shared with you.

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Their money habits will be noted by peers

Their money habits will be noted by peers

Remind the child that the money habits they display are noted by their peers and friends, and will lay the foundations of how money transactions will happen in a group. Tell them it is better to split the expenses equally. Lending to friends is a strict no-no.

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Be prompt with sending them money

Be prompt with sending them money

Set a specific date and make sure you have remitted the money as promised, so that they learn to await the credit and manage themselves better. A fixed sum to pay for emergencies and leave that amount in their bank account.

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Teach them the basic rules of safe banking

Teach them the basic rules of safe banking

Teach the child the basic rules of safe banking, using a credit card, and online transactions. Ensure that they know what they should do if they lose their debit cards or identify any misuse.

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Convert minor accounts to major account when it is time

Convert minor accounts to major account when it is time

If there are investments back home in which they are first or second holders, after they reach the age of 18, these will not be accessible to you. Before they leave home, convert them from minor accounts into major accounts. Their signatures have to be attested by the bank, and submitted to the concerned institutions.

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Allow them to enjoy their financial freedom

Allow them to enjoy their financial freedom

Let them know that you will wean away from their finances over time. Do not be too eager to know what their salary would be or compare them with others. Allow them to enjoy the financial freedom for which they have worked hard.

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