A good parent is not when their child is getting a fantastic job in a big company with a considerable salary, nor when their child has excellent values. If you imbibe good attributes in your kids, you are a successful parent. One attribute is teaching the child how to manage money. They cannot spend the amount of money they want and how much they want. They need to realise how much money matters and how to save it.
You should give them an allowance or pocket money at the primary level when your child is old enough to spend all month long. Give them minimum amounts as they will make mistakes where at the beginning of the month they might spend a lumpsum on something and have to go thrifty the rest of the month. Your child will think about next month’s financial planning.
You can move to the next level if your child has mastered how to use their pocket money, letting them know about credit cards and debit cards. A credit and debit card is a valuable tool and can bring a lot of good when used smartly, but if not correctly used will cause a lot of trouble in your financial life. It’s best to start early with kids and teach them about credit cards and debit cards before they get one of their own and run into trouble.
It’s also nice because once your kids finish their education, they may get in a college away from you, where they may require money from time to time. As a parent, it’s also easy for you to transfer money to your account and keep an eye on where and how your kids spend money to make sure they don’t get into bad spending habits. Also, here it’s best to be careful and teach your kids by getting them a debit card and then a credit card to them.
Debit cards
When it comes to plastic money, debit cards are the easiest to handle because the sum you have in your bank account is the money used. It is effortless to obtain a debit card by simply opening a savings account that requires a minimum balance of INR 1000 to INR 5000. Each month now, you can transfer the necessary amount into your child’s bank account that they can spend. Your child is now compelled to spend the money you are depositing and schedule their expenses accordingly. It is an excellent way to learn about savings and interest. Even if they use it as an ATM card to withdraw money, it will restrict the withdrawal limit.
Credit cards
Credit cards are a bit tricky to use. While financial management can get boring, if you look at it as a game of strategy, it can be made fun. First, teach them about credit and credit limits, that the child borrows money from someone, and that they must pay it back in the form of tasks that increase if they spend more than the credit limits you allowed them to use. They will start to stay under the radar and ensure they get out of their chores.
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