What Kids (11 to 13 Years) should know About Money

In continuation to previous posts What Kids (3 to 5 Years) should Know About Money & What Kids (6 to 10 Years) should Know About Money now move further ahead for kids whose age between 11 to 13 years. 

Kids (between 11 to 13 years old):

1. You should SAVE AT LEAST a RUPEE for every 20 - 50 Rs. 

Following activities are needful to reach this goal: 

• Encourage your child to always save 7-10% of the money he gets.
   
• Have your child set a goal to buy something he wants, and have him work toward that amount.
   
• To reinforce the savings habit, go to the bank two to three times a year with your child to deposit savings into his account, and look at how much bigger the balance is on each visit.
   
• Consider a "matching plan" for your child's savings: You put in 20 Rs. for every 100 Rs. he saves.
  When you are out for shopping, point out essentials such as food and clothing, and ask your child to describe items that she may want but are optional.

2. Entering PERSONAL FINANCIAL INFORMATION, like a bank or credit card number, online is risky because SOMEONE COULD STEAL IT.

Now a days most of the kids have access to internet, so little precautions are needed on this side as well. Following activities are useful:

• Discuss the dangers of entering personal information online.
   
• Explain that thieves can use Social Security numbers or other personal information to open credit cards or create fake documents.
   
• Explain that "free" offers online, such as cell phone ringtones or games, are scams to get people to spend money without realizing it.
   
• Make it a rule that your child never answers emails from someone he doesn't know and never clicks on pop-up ads.  

3. The sooner you save, the FASTER YOUR MONEY CAN GROW from COMPOUND INTEREST.

Following activities are beneficial:

• Compound interest is when you earn interest on both the money you save and the interest you earn.
   
• Show your child the following: If he sets aside Rs. 1000 every year starting at age 21, she/he'd have about Rs. 1,58,626.00 at age 55. However, if he begins saving at age 30 he'd have about Rs. 73,105.00 at age 55. Assume the account earns 8% every year.
• To compute compound interest, use the calculators at TheCalculatorSite.
   
• Discuss how much your child can save. What will he have to give up? Is it worth it? 

4. Using a CREDIT CARD IS LIKE TAKING OUT A LOAN; if you don't pay your bill in full every month, you'll be charged interest and owe more than you originally spent.

Following activities are useful:

• Discuss why you should not use a credit card (Loan) to buy something that you can't afford to pay for with cash.
   
• Look at credit card offers online with your child, and compare the interest rates.
   
• Using the Credit Card Repayment Calculator at RupeeTimes, see how long it could take to repay a Rs 5,000 credit card debt by making the minimum monthly payments.
   
• Discuss how a credit card can be useful for making purchases online, or as a convenience.

What Kids (6 to 10 Years) Should Know About Money

In continuation to previous post What Kids (3 to 5 Years) should Know About Money, now move further ahead for kids whose age between 6 to 10 years. 

Kids (between 6 to 10 years old):

1. There's a difference between THINGS YOU WANT and THINGS YOU NEED.

Following activities are needful to realize: 

• When you are out for shopping, point out essentials such as food and clothing, and ask your child to describe items that she may want but are optional.
   
• Talk about how your family decides what to buy and what to pass up. Which is more important, buying cookies or fresh fruit? Soda or milk?
   
• Draw a circle and divide it into sections for food, rent or house payments, clothes, and "optional items," to show that there is a finite amount of money to spend.

2. You need to MAKE CHOICES about HOW TO SPEND YOUR MONEY.

Following activities are beneficial:

• Include your child in some of your small decisions. For example, at the grocery store, explain why you pick one item over another.
   
• Give your child 10-30 Rupees and let her / him choose which fruit to buy.
   
• When shopping with your child, ask yourself aloud: Do I need this item? Can I borrow it? Would it cost less somewhere else?

3. It's good to shop around and COMPARE PRICES BEFORE YOU BUY. 

Following activities are useful:

• With your child, compare prices for a particular toy at various stores.
   
• Ask for discount / negotiate for price and show your child how much you are saving. There is not shame on asking for discount / negotiate.
• Consider allowing her to keep part of the savings, if she / he helps ask about discount.

4. It can be COSTLY and DANGEROUS to SHARE INFORMATION online.

Now a days most of the kids have access to internet, so little precautions are needed on this side as well. Following activities are useful:

• Know the websites your child visits.    
   
• Decide which websites are appropriate, and block any inappropriate sites using parental control software.
   
• Make it a rule that your child never gives out any personal information—like her birth date, address, phone number or school—when on the internet.
   
• Don't allow her/ him to buy anything online without your permission.

5. Putting your money in a SAVINGS ACCOUNT will PROTECT it and pay you INTEREST.

• Visit a nearby Government Bank, Government Undertaking Bank or Post Office with your child. You can use some story on RBI site to explain importance of Savings account in individual's life.
   
• Ask about the interest rate on a Savings Account. Illustrate her / him the power of interest / compounded interest.
   
• Discuss with your child how money in savings accounts is protected by Government driven body insurance. If the bank goes out of business, she will get her money back.
  
• Open a savings account for your child.

What Kids (3 to 5 Years) Should Know About Money

There are few things that your kid should know about money / finance to live financially smart. Kids should have some knowledge depending on their age groups. Its not like financial terms, economic lessons etc.

Kids (between 3 to 5 years old):

1. YOU NEED MONEY to BUY things

Following activities are useful: 

• Identify coins and their value. Comparison between coins and currency notes. There are some games on RBI site


• Discuss how you may value something that is free, such as playing with a friend, listening story from mother, father or grandparents.


• Identify items that cost money, such as ice cream, fuel for the car, or clothes, Movie, Lunch / dinner at restaurant.

2. You EARN MONEY by WORKING

Following activities are beneficial:

• Describe your job to your child. What work are you doing? Your timings of job / service.


• Walk through your neighborhood or town and point out people working, like the bus driver or the police officer.


• Explain that some people start their own businesses like clothing stores, grocery shops or restaurants, and those people are called entrepreneurs, businessman / businesswoman.


• Encourage your child to think about how he/she could earn money by setting up a lemonade or cookie stand for example buy things from whole seller and sell them to end customers.

3. You may have to WAIT BEFORE YOU CAN BUY something you want.

Following activities are 

• When your child is standing in line / queue for a turn on the burger / pizza, or looking forward to her favorite movie ticket, point out that sometimes we have to wait for things we want.


• Find three jars (or cans) and label one for saving, one for spending, and one for sharing.


• Suggest your child to put some of the money she / he gets (as a gift from someone) into the saving jar, so she / he can buy a favorite toy or treat when she / he has saved enough.