Making kids money-wise

Umm Zakariya lists numerous advices for familiarizing your kids with the world of finance and the responsibilities that come along with it.

As parents, we want the best for our children. We want our children to be ‘happy’ and that usually translates into us plying our children with expensive clothes, toys, gadgets and paraphernalia, while giving into their every whim and desire. In pursuit of this ‘happiness’, we end up making our kids exceedingly materialistic - we either forget about or neglect educating them about the values of earning it, the judgement in spending it, and the virtues and avenues of saving it.

Here are some simple and easy ways of helping our children become money-wise, so that they are not only aware but also ready to face the real-world and its sharks, when the time comes!

Go Shopping Together

Take your children shopping. Let them understand the simple truth that we need money to buy things! Let children get an insight into how you select items based on affordability and that not everything one wants can be bought, as there is a budget for everything.

Set a Pocket Money/ Monthly Allowance

Allowance is an important tool you can use to form sturdy lifelong fiscal habits in your children. However, you need to guide them, on how to manage and spend, in order for them to become responsible money managers.

Let Them Earn

Another lesson you need to teach your children early on is the diligence that goes into earning money. And it goes without saying that the best and most effective way to teach the value of money is to let your child earn! Help your child set up a small business, such as making and selling greeting cards or jewellery, wrapping gifts, etc. There are countless ideas online. Alternatively, you can pay them for extra chores they do beyond their usual responsibilities. You could also put up a stall at any of the various charity Melas and let them help out.

Open a Savings Account

Open a child-friendly bank account for your children or let them open an account with you as the banker, if they are very young! Teach them to save their Eidi, other gift money and anything they earn for things they may want. You will see that they will appreciate what they buy from their own efforts more than anything you buy for them. This is also a good time to teach them about Riba (interest) and Allah’s (swt) commandments regarding it.  

Teach Them to Budget and Plan

Encourage your children to plan and budget. Help them to decide their short-term and long-term goals about the things they want to buy and how they can manage their money to achieve both. Also, teach children the importance of moderation. Help them understand that they should not be extravagant and must save what they can for the future.

It’s never too early to start! We must realize that unless we put the responsibility of decision making and accountability on their shoulders, our children will have to learn this the hard way in the real world. Help children gain these values early on by letting them make their own money-related decisions. Even if they end up making a loss, this is a lesson better learnt sooner than later!