Teaching Kids about money

by | May 25, 2019 | 0 comments

Babies are only born with survival instincts. But you can greatly influence, what he/she becomes after 20 years. One of the best gifts you can ever give your child is to teach them to think differently than others.

I am not qualified to give parental advises, but one can always learn from other’s mistakes. 🙂 Reading a book, an article or anything for that matter where people have written about their worst mistakes, costs far less than making them on your own. I wish my parents had told me this when I was 5. Coming to the point, here are my thoughts.

Don’t give them everything

You can teach a kid that if he/she falls down, it will pain. But the kids will never know what pain is, until they fall down. I understand the emotion of giving your kid all the comfort in the world so that they never go through the bitter experiences that you had. That will just make them weaker or worst, incompetent. Try and strike a balance. Make sure that the kid understands that they will not get everything that they ask for but, in the meantime, also feels that you are there for him/her whenever they need you. That’s when they start thinking about making the best of what they have…their brain.

Ask them about failures, not just successes

Everyone is happy when their kid wins a competition or gets a first rank in school, but nobody likes to talk about (even get upset) their failures.

If you have a custom of eating dinner or watching TV with your kids, simply ask them, “Tell me what you failed at this week”. The kid and the rest of your family might be surprised but do ask. Encourage them to talk about their failures from their young age. When they win, they did everything right and they know it. It’s the failures, which give them an opportunity to learn. To learn, they need to be comfortable sharing failures.

Take them for a hike

I visited a digital art museum in Tokyo few months ago. I thought it was a display of technology but when I sat in a dim lighted rest area, they had written the whole science behind the reason for making digital art museums. The facts with scientific evidences and examples were fascinating.

It claimed that we live is a two-dimensional world where everything is flat, like our mobiles or laptops. The biggest source of information to your brain is your body. When your body senses only 2D world, the information it passes on to your brain is 2D. An example question was, how can you extract the yoke from the egg without breaking its shell ? To answer this, the future kids will think of egg as a flat bulls eye egg instead of the 3D egg that comes out of the chicken.

They also found that, kids who grow up away from the flat city world have creativity levels and out of box thinking ability 40,000 times more than the kids who grow up in the city. So instead of taking them to the digital art museum, take them out into the nature. Take them for a hike. The information the body receives from the real nature can never be imitated in an art museum. Our kids deserve better than a projector.

Build a system to teach them about money

Did you know, most of the billionaires in the US, including Warren Buffet and Bill Gates distributed newspapers in their teens? Was that just a coincidence? May be not. One thing is common with newspaper distribution is that they all were compensated based on the number of newspapers they distributed in a specific amount of time. Is it possible that their brains continuously tried to find the most efficient way to distribute the paper to earn more ? Most of them said, they did that just to earn more cents.

The Indian ace investor Mohnish Pabrai said in his interview, he never had a chance to distribute newspapers in India but after school he helped his father run the business where they earned just enough money to survive for another day. He says, business comes easy to him coz he has seen it all.

One of my dear friends seems to have figured it out. Here is his blogpost on medium.com where he explains, how he built a reward point system for his kids. Read the blog here >>

It is simple, yet effective. The more they do, the more they earn. It will help kids understand that the amount of work they do can directly translates into equity.

Involve them in your money matters

Lead by example. Kids learn by looking at you and looking up to you. When our kids grow up to be teenagers, all we want them is to get a high score and get into best universities. We don’t expose them to the world of money or business until they start earning in 22 or 23. That may not be a good idea.

Involve them in all your money matters, especially in the age of 12 to 19. This is when most part of the rational & intuitive brain develops. And hormones too. So, it’s not going to be an easy ride but once they are wired right, it will stick to them for rest of their life. Tell them how you manage money and why you do it. Don’t tell them “Money is the root of all evil”, instead, teach them “Greed is the root of all evil”.

Help them learn, not just study

When it comes to kids, we are more afraid of what will our society think of us and our kids. What will others think, if they fail or don’t score enough in the exam. In India, the schools teach the kids about, how to crack the exams but completely ignore “learning”. Learning is not only about science, mathematics or arts, but about learning a little about everything, including life.

The kids these days are born into the flat world of competition. In the midst of competition and social pressures, they just become another sheep in the herd. Don’t they deserve better ?


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