Open a bank account in your daughter’s name and give her a debit card. Put a fixed amount in the account every month and let her use it for small transactions. A teenager who manages her allowance herself will understand the value of money more effectively.
By Preety pruthi
Most women prefer not to get involved in financial decisions and money matters. The financial reins of the average woman are usually in the hands of her male relatives. Before she gets married, her money is handled by her father or brother. After marriage, the husband controls the purse and later, her sons manage her finances Only a small percentage of privileged women in the country have a meaningful say in how and where a household spends and invests.
Who is responsible for keeping women away from the financial affairs of the family? Though boys and girls get the same education at school, why is it that one gender takes charge of money matters while the other quietly steps back? It’s a problem rooted in centuries of social conditioning, but it is now high time we break the mould. Financial awareness is one of the most important lessons a parent can impart to her children. No school or college teaches money management skills, so the responsibility is squarely on you as a parent to mould your child’s financial future.
A monthly allowance is a good way to get started. Open a bank account in your daughter’s name and give her a debit card. Put a fixed amount in the account every month and let her use it for small transactions. A teenager who manages her allowance herself will understand the value of money more effectively. In most cases, once a child is given control, she becomes more careful with money. This is particularly useful in these times of online shopping and food ordering apps.
Don’t forget to teach your daughter the importance of maintaining privacy of the card details, and also to observe basic safeguards when conducting online transactions. This is critical in light of the recent surge in phishing scams and online frauds. Review and discuss the monthly statements with your teen. All importantly, this process will help monitor your child’s preferences and spending patterns.
If your daughter wants an expensive gadget, tell her to start saving for it and offer to put in a matching monthly contribution. So, if she saves `1,000 a month and you put in another `,000, she would have saved about `12,000 in six months. If she falters and misses on a contribution, you also don’t contribute anything that month. Soon she will realise that her savings will grow if she contributes regularly. Once she gets into the habit of saving for goals, she will be able to manage her money better.
There is more to money than just saving and spending. Introduce your daughter to the world of investing. Patience is a key factor in financial success, and parents need to develop and inculcate this quality in children. Open a fixed deposit or recurring deposit in her name, thereby demonstrating how the money grows, if kept untouched for long periods. Older children can be introduced to equity investing and mutual funds so that they get acquainted with stocks before that take a plunge in the real world.
You have an opportunity to transform your daughter’s financial life by teaching her the basics of personal finance. A child who learns about money management early in life is better prepared for the challenges to follow. The best gift you can give her is not the latest iPhone, a lavish dinner or an expensive dress. Financial literacy and monetary empowerment will be far more durable assets.
(The author is Director, MyMoneyMantra. Her views expressed in the column are personal)
(Disclaimer: The opinions expressed in this column are that of the writer. The facts and opinions expressed here do not reflect the views of www.economictimes.com.)