Young India saves to seek financial empowerment

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Riddhi and her younger sibling Anurag, both had got the best of the facilities at their disposal. Their working parents tried to fulfill all the demands of their children.

However, post-Covid, a lot of things changed for the family. Riddhi’s father, who worked in the marketing department of a hospitality brand, had to face monthly pay cuts due to the impact of the coronavirus pandemic on the company’s business. Riddhi’s mother works as a teacher and had to adapt to the work from the home approach of the online education system that has defined the post-covid-era. Her mother, who would would juggle between work and family, knew the value of imparting good money habits to their children.

‘Earlier, when I use to receive a decent salary, I made sure my kids are not deprived of anything. But after my salary shrank, I realised it is important that your kids learn about money and how important it is to save at an early age,” she said.

Another boy, Tarush, who lives in Chandigarh, studies in the 8th standard. He started saving money from his pocket money and allowances he received from the family at a very early age.

“When you are growing up with your grandparents around, you realise that they spoil you with extra pocket money and gifts on festivals, or when you do something good.’ He also mentions this excitedly when he was much younger, he saved his money in this very cool piggy bank that also had a lock. Later, his grandfather also opened a post office saving account for him, where we would deposit some money to save. Today, he has a decent saving and hopes it will prove to be financial support for his higher education that he plans to do in the US.

The above two stories highlight the importance of inculcating personal savings and good money habits in kids at a young age. The habit of savings needs to be inculcated from an early age. Investment fundamentals have changed in the last decade and going forward they will change more dramatically.

Here are some innovative ways suggested by Tax Guru about how you can inculcate the habit of savings in kids:

• Involve them in budget planning and build awareness of savings and investments
• Give them fun tasks like allocating a small amount to spend and buy only one of the two items they would want to buy. This will teach them how to differentiate between your needs and your wants.
• Make grocery shopping fun and interesting for them. This will make them aware of expense management also how a judicious mix of resources could create balanced shopping.
• Give your kids a budget and ask them to create three buckets for the budget- Spend/Invest/Save
• Make them understand financial concepts with an innovative and practical approach
• Bring back the piggy bank saving habit to life
• Open a saving account for your children so that they can learn to manage the money. This is one of the biggest tools where all expenses related to the children could be discussed and they could be involved to manage their pocket money judiciously.