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Secrets to raising financially smart kids - the 10, 5 and 3 rule

Finance is a core life skill for kids - as important as good manners, basic maths skills and grammar. After all, we spend so much time thinking about making, spending or giving away money, so its important to become smart in handling money. Yet, even basic finance is something that we don't take seriously when it comes to kids, the best time that we can influence our kids' views on money. How many of us got told by our parents how to use credit cards or the advantages of investing through SIP? Don't you think we would have benefited if our parents had given us some "gyan" on these matters? If so, then avoid making the same mistake and give some financial "gyan" to your kids or nieces and nephews so they grow up to financially smart kids, prepared for whatever financial future awaits them.

Research has shown that the sooner you start, the better the chances that your kids will avoid making mistakes that our generation might have made with out money. In fact, in many countries, children as young as 3-4 years of age get lessons in basic personal finance. So start early!

With that spirit, here are 10 questions, 5 skills and 3 products you must spend more time on for your children:

10 questions that you and your spouse must answer
5 financial skills to teach your kids
3 essential financial products for your children

Watch the video

1. What is your kids' attitude towards money? Are you aware of how they treat money?
2. What messages are your kids getting about the reality of money (e.g., is it a bottomless pit, does it grow on trees, "parents are my ATM")?
3. What are your family's financial values - do your children understand them? Are you a spender or saver
4. Do you commit time to offer your kids guidance on money matters? How much time did you spend last week in explaining to them why the stock market went up 20%?
5. Do you and your spouse agree on how to raise your kids financially or do you fight over this? Does one of you give in because the other one is very strict?
6. Are your kids "set for life" because you happen to be very rich? Do you have any idea on how to instill financial discipline in your kids who can and do have everything?
7. Do your kids know how to make money and keep it? Do they know how to make investments and learn how to make their money grow?
8. Do you know who are your kids' role models? Are these useful role models to follow and learn from?
9. What financial habits do you want to pass on to your kids?
10. What have you taught your kids to start them on a journey of financial literacy that will last them a lifetime?

1. How to operate a bank account - depositing money, using cheques
2. Distinction between consumption and investing - how they spend their pocket money
3. How to spend wisely - discuss choices regarding best use of money
4. What is credit - loan that has to be paid back at month end
5. The value of saving and investing - compounding of capital to grow wealth

1. Bank account to familiarize them with basic money transactions
2. Child Plan to give them a corpus of money for use later in life
3. Education loan for their higher education in India or abroad

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