While we often think of paternal influence in terms of life lessons, emotional support, and guidance, one area that deserves special attention is financial education. In an increasingly complex world, it’s crucial for fathers to actively teach their children about money.
This Father’s Day let’s delve into the importance of financial education and how fathers can become valuable mentors in their children’s financial journeys through a short story!
As Father’s Day approached, Swaminathan reflected on the significant impact he had on his children’s lives, who are now in their teens. He always taught them valuable life lessons, offered support, and provided guidance.
Realizing that it is now the right time to teach them about money matters, he decided to become their financial mentor.
Saving, Budgeting, and Spending
One rainy evening, Swaminathan gathered his kids around the kitchen table. Excitedly, he introduced them to saving, budgeting, and smart spending. But how?
There was a toy coin jar that magically grew in size with every spare penny, a budgeting board that played a cheerful tune whenever expenses were accounted for, and a clever little device that helped identify the best deals in town.
He told them stories of a young couple who saved diligently and traveled the world, a student who budgeted wisely and graduated debt-free, and a retiree who invested wisely and lived a comfortable life.
Inspired by these tales, his kids couldn’t wait to put his newfound knowledge into action. They started to use the magical coin jar, the budgeting board, and the deal-finding device, eager to start their own money-saving adventure.
Being a role model
But Swaminathan didn’t stop there. He used to give monthly pocket money to his children to teach another lesson – “The lesson of early investing”. One day after getting the pocket money he overheard his children discussing spending the pocket money for some impulsive buy.
He decided to teach his children to experience the power of early investments. He shared his own story with them. He told them that at the age of 10, Swaminathan received a small sum of money as a gift from his grandparents.
While some children might have spent it on toys or treats, Swaminathan had a different idea. He had overheard his parents talking about the concept of investing and how it could help grow money over time and decided to take a leap of faith and invest his gift.
Start early Investing with small and power of Compounding
The investment grew slowly. He told his children that he always remained patient and continued to contribute a portion of his allowance regularly. He believed in “An early small start is always bigger than starting big later”.
As the years went by, Swaminathan’s investment began to show promising returns. The power of compounding was at work, multiplying his initial investment and the subsequent contributions he made.
He watched with awe as the numbers grew steadily, surpassing his initial expectations. He created a financial safety net. His children got excited and with the guidance of Swaminathan, they opened a savings account and put the money into a low-risk investment option.
It wasn’t a significant amount, but it was enough to start his journey towards financial prosperity as earlier said “start small” because the “later can be late” and won’t come soon.
Financial Literacy along with Character development
As time went on, Swaminathan realized that financial literacy was crucial in the digital age. He made learning about money fun by creating a game where they earned “income” by doing chores.
Through this game, they learned about income, expenses, debt, interest, and credit and were also exposed to small chores which help them in future courses of life.
Swaminathan led by example, practicing responsible spending and saving. He involved his children in tasks like creating a family budget and tracking expenses.
These experiences showed them the importance of good financial habits and brought more confidence in them. Swaminathan also encouraged his children to dream big and be entrepreneurial.
They brainstormed business ideas and explored side hustles. Swaminathan supported their ventures, teaching them the value of hard work and innovation.
Oath to take
As Father’s Day approached, Swaminathan felt very proud. He had become not just a father but a financial mentor to his children. He equipped them with essential tools for their financial future.
He instilled financial responsibility, belief in savings and investments, and a foundation of financial literacy. Like Swaminathan on this Father’s Day, let’s take an oath to embrace the role of a financial mentor to our children.
Let’s pledge to prioritize their financial education, knowing that it will be a gift that will benefit them for a lifetime. Together, we will navigate the world of money, equipping them with the knowledge, skills, and mindset they need to make sound financial choices and build a prosperous future. Happy Father’s Day!
(The author is CEO, FundsIndia)
(Disclaimer: Recommendations, suggestions, views, and opinions given by experts are their own. These do not represent the views of the Economic Times)
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