Indian homes are great places to be. We, Indians are wonderful people to be around as well. But, NOT talking about money and other coming-of-age topics is a norm. The paradox is bizarre, as Indian love to save big and know just how to do that. But they NEVER want to talk about it. Especially to their teens.
This is where things can take an unhealthy turn when your Indian teen has a financial situation to deal with but is not rightly equipped to do so. Thankfully, with the changing times, parents today are starting to realize the importance of financial literacy in children.
Let us take a look at what every teen should know about money.
Learning the Art of Savings for a better tomorrow
It will not be too long before your teen grows up into an adult. This will involve responsibilities of all kinds that need to be addressed. Finance is a major part of an individual’s life, and savings are the basis of most financial aspects. Money management skills, juggling expenses, and wealth-building for a better tomorrow need consideration. For this, teaching your child the art of savings is essential so that they can embrace the same in their adulthood.
Through Using Fyp teens can learn how to save money in a fun and interactive way.
Parents won’t always be available to help their children if they get stuck in a financial problem. For this, they must learn the basics of money the right way. This could start small, like small chores around the house, a part-time job, an internship, and later a full-fledged job: goal setting, savings for purchasing items of desire, or learning investments. Of course, there is no need to shy away from discussing money matters with your child. However, it is important to make them understand that money-making goes a long way in ensuring a better tomorrow.
Fyp allows them to have their own account that they can use independently to receive money and use it to spend as per their own will. This helps in teaching them the importance of money and financial independence.
Disciplined Spending Methods
Money does not have to be saved the entire time. There also has to be a healthy chunk of spending for the good things in life. But the idea is to ensure periodic and timely savings from your allowances and income to ‘invest’ for a bigger plan ahead. This will teach the teens the practice of savings from their income to be able to afford the luxuries they have been aiming for. In a nutshell, it is essential to differentiate between the ‘wants’ from the ‘needs’. This will have the teen set up goals to achieve a certain sense of achievement and positive satisfaction.
When teens use Fyp to pay for something, they can easily track their expenses and know exactly how much and on what they spent their money.
The early exposure to savings and healthy investment ideas will drive young teens to look for jobs. The best aspect about the early job hunt is that it eventually allows them enough time to ‘test the waters out there. This way, there will be enough time to make mistakes and mend them in due time. It also allows them to discover themselves; are they designed for Hospitality, Engineering, Arts, Social work, or Media? An early start allows them to finally switch between fields to settle into their ‘true calling’. Also, the idea about how money works and how to make it work for oneself is picked-upon. This will offer them the insight to learn where to earn, what to aim for, and how to manage their lives around their aspirations and goals.
The Financial Products
The teenage is a ‘Prelude’ before adult life. Financial knowledge in your teenage life offers a ‘stage setup’ for the more serious phase of your life. After an individual reaches the age of 18 years, they are going to be able to access a wide range of financial products, like Credit cards, loans, and more. But, money management skills will offer them the right knowledge as to how to be able to have the financial products to be able to work for them. Hence, teaching young children the art of saving money will form the building blocks for the future financial frames to set upon.
This is where Fyp is a game changer for teenagers. By allowing teens to have their own account and debit card, it lets them have a taste of the coolest financial products that adults use so that can be future ready from an early age.
What are you going to do with all the money you have saved? Well, smart investments are a skill that needs to be developed early on. Hence, financial literacy is a must if you want your child to be able to make the ‘money work for them. This includes working out a plan if they need to purchase a house in the future or higher studies abroad. With the savings and spending knowledge gained in their early years, the teens will be able to ‘map out a plan of how to reach their goals on time eventually. Also, it is a great idea to assist your teen in setting up financial priorities.
For example, paying off a student loan is almost always more important than buying a car in the immediate future. As a parent, it is also important to teach them to construct basic and workable plans and stick to them. Once you have a steady source of income, it is important to devise a plan of action that includes savings and spending investing.
The Magic of Compound Interest
Compounding is one of the most secure, risk-free, and high-fetching financial ‘tools’. Some of the most successful people in the world swear by the ‘magic of compounding. Moreover, the knowledge of compounding starts early on. If the child can grasp the concept of Compound Interest, it will be easier for them to be able to plan out their financial lives easier.
Also, the Compound interest stresses the idea of early investments to achieve high returns for the rest of one’s life. Through this financial concept, one can ‘make their money grow’. So it is worth your time to sit down with your child and demonstrate to them the wonders of Compound interest. It clearly shows them how to save and invest even a small amount of money to make it grow for the future. This way, smart and early investment can develop into a strong financial backbone for comfortable adulthood.
Much like everything else, financial knowledge is also important for teens. As you keep exposing them to the various folds of life, money needs the same attention with time. To grow into responsible adults, they must earn the ‘ways the money works’. Therefore, financial literacy and its exposure to teens is necessary for them to be able to face various situations throughout their lives and Fyp is there to provide all they need to grow up to become financially independent smart adults.