Ask any parent what goes into raising their children. The responses will mostly revolve around education, imparting the right values, and developing notions of honesty, compassion, and integrity. It is undeniable that, in this day and age, a lot goes into raising children, especially given our goal is to ensure that our children succeed in life.
Our young ones are like sponges that are constantly absorbing everything they are exposed to. While we are busy doing the best we can, a crucial life lesson we often overlook is cultivating a good mindset towards money management. For many, it may seem like it is too early to teach the kids about money management and financial prudence, but exposing them to money matters early on can develop a positive attitude towards financial planning and make their money ‘smart’.
Bring finances up in conversations
A good starting point can be normalising conversations about finances within the household. By frequently having age-appropriate money conversations with children, we can establish a more open, relaxed environment for learning and asking questions about finances. Allotting pocket money and getting the kids to budget, monitor expenses, and save every week can get them into a habit of always keeping tabs on their spending and saving. Besides imparting financial literacy and instilling savings habits, a major step parents can take to protect their children is investing in a robust savings plan.
Banks and financial institutions have come up with several options to mobilise parents to set their children on the path of financial freedom. In doing our part, we at National Bonds have curated a ‘Junior Savings Account’ that allows parents with young children and students the flexibility to save as much or as little as they want each month and earn a profit on their savings. While it is reassuring to note that a substantial number of people are saving towards the education of their children, only less than 10 per cent of our customer pool comprises minors – a number that we hope to see growing significantly.
To encourage this growth and bring about higher financial literacy among children, we launched a unique savings instrument in the form of gift certificates. The aim here is to help trigger the conversation about saving between parents and children while also supporting parents to give a gift that has the power to grow over time.
Start at schools too
At a macro-economic level, the UAE, among many other nations, is strongly emphasising developing a savings culture among its people. This vision is based on the belief that financial prudence at all levels of society and across age groups can bring a positive economic impact and in turn build a strong nation. In this context, I believe educational institutions have a role to play in further accelerating this vision of the government by making financial literacy a major pillar in the existing education framework. Last year, we signed a strategic partnership with Taaleem, one of the UAE’s leading education providers, to build essential financial planning skills among children of all ages. We have delivered several interactive seminars for parents and students across the network of Taaleem schools to shed light on the existing savings options and help them take informative steps toward them.
Children are the future. As a community, we have a huge responsibility towards them and need to work collectively to enable and empower them. Providing them with a protective yet open environment to take chances, make mistakes and grow will play a pivotal role in helping them become successful, financially responsible adults, who can shape the future of our society, our nation, and ultimately our planet.