We, as parents, teach our children a lot about good manners, human values, morals and ethics, social etiquette, et cetera. At school also they have subjects such as moral science and value education. But when it comes to teaching about money and finance, we generally feel that they are too young for it.

However, money and finance are a part and parcel of our lives. And just as there is good and bad behaviour, there is also good and bad financial conduct. Therefore, we need to educate our children about the basics of money and money management such as budgeting, saving, investing and not the least spending, from the early years.

Good financial habits need to be inculcated from childhood.

Moreover, today children are big spenders — games, CDs, movies, dresses, cosmetics, etc. Hence, it is important that they learn to appreciate the value of money.

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1. What is ‘money’ all about

The first step is to create awareness about money. We need to explain our child the concept of money. Parents go to work to earn money. This money is kept in the banks for safety. When we buy anything from the market such as toys, dresses, food, etc. we have to pay money.

Even for going to school we have to pay fees. When we travel say in a taxi or an aeroplane, again we have to pay for the tickets.

Taking our child for daily shopping is a good way of making them aware of real life examples. Show them the products and their prices. As they grow, make them compare prices.

Give them coins and notes to get a feel of money. Start early. Even children of 3-4 years can differentiate amongst coins.