5 Money Values You Need To Teach Your Kids

Whether you're rolling in dough or living pay check to pay check, you owe your kids the responsibility of inculcating solid, sustainable money values in them. In many ways, how your kids view and approach the concept of money once they stand on their own two feet, will define and shape the course of their careers and financial lives. Here are five important lessons that you, as a responsible parent, should teach your kids from as early on in their lives as possible.

Thrift
A penny saved is a penny earned. Teach your kids to look for the cheapest possible option when it comes to buying any product or service; without materially compromising on quality, of course. Also, educate them on the importance of driving a hard bargain with everyone except the less fortunate. The art of saving small sums of money by cutting out wasteful expenditures is a valuable skill to possess in today's hypercompetitive, dog eat dog world.

Goal Oriented Saving
Teach your kids the importance of setting financial goals and saving for them systematically. For instance, your kid may be clamouring for the latest video game, mobile phone or gizmo. Rather than just ceding to their demands each time, encourage them to save for these pleasures at least partially, through their pocket money. As a further step, you may even show them how to invest these short-term moneys via SIP's in liquid funds.

Delayed Gratification
The famous marshmallow experiment conducted at Stanford University comprehensively proved the importance and relevance of being able to delay gratification - instead of always instantly succumbing to our desires. Kids who were able to 'wait it out' for a second marshmallow fared far better in life than the more impatient ones who were unable to control their impulses. Keeping this in mind, it would be wise to inculcate the ability to delay gratification in your kids early on in their lives. Systematically reinforce this habit by rewarding them with something better (A better video game, A better travel destination, and so forth) if they display the ability to wait long enough for it.

Responsible Spending
The ability to spend responsibly is one that will not just impact your child's personal life, but his or her business or career success as well. After all, capital budgeting is such a critical aspect of business management! In order to ensure this, you need to be very strict with the monthly budget that you allocate to your kids. If they end up splurging a large part of their monthly pocket money on one thing (IPL tickets or a new video game, for instance), they need to learn to compromise on other aspects of their lifestyle (say, outings with friends) for the rest of the month to compensate. The ability to do so will prove invaluable to them in the long run.

Philanthropy
Lastly, teach your kids the value of giving back to society. Whether its elderly people, homeless people, or animal shelters; your kids should be taught the value of generously helping others, early on in their lives. To begin with, push them to 'tithe' a part (one-tenth) of their pocket money as donations to a charitable cause that appeals to their heart. As the years go on, giving back will become a natural aspect of their personality; shaping them into value-creating members of the society in the process.