United Arab Emirates: Four parents share practical tips on how to teach kids financial skills

Dubai: Teaching children the value of money from an early age is vital for all parents as it instills and turns into real spending behaviors in children, which will stay with them for the rest of their lives. Therefore, when children are exposed to financial education from an early age, it provides a solid foundation for them to have a successful financial future.

Residents of the United Arab Emirates share the practical methods they adopt to educate their children about money matters from an early age.

Ali Jafri, a Pakistani national based in Dubai, father of three Abeeha (5), Kabeer (7) and Hassan (10), said: “Children should learn the importance and value of money as soon as they are they start to care about their precious toys and the like. As parents, we need to teach them to value money and take care of their valuables responsibly.

Jafri has given pocket money to his children from the age of 6 and teaches them how to save to buy their favorite toys from this savings.

“My rule is simple: if one of the children wastes or loses money in one month, they will not have pocket money for the next month,” said Jafri, who works as a professional. sales and marketing for a real estate developer.

“I have set their monthly allowance at $ 100 (Dh367) each, and I explain to them that they must save 30% of what they receive each month and only consider using the remaining amount for their needs, but not all of them follow. this advice. “

He sits down with the children to plan the high priced items they are asking for. “For example, my oldest wanted to buy a gaming PC, which costs around Dh11,000. So, first, we sat down together to decide what spec we were looking for; after that, I asked him to do his research on Amazon and find the best deal possible.

“He spent three days, and during that time he got me five amazing lists for particular specs. I had given him a realistic budget of Dh 6,000 in which he had to research this, although ultimately what we bought was slightly above said budget.

“Making them responsible for their own money / allowance instills in them a value for money, and in the process, they learn to take care of things and then not to mistreat them,” he added.

Research shows that learning to delay gratification is an essential skill in which kids know they can’t get everything in life instantly. Dubai resident Reshma Bhatia, an Indian mother of two Paarth and Pari, both 8, doesn’t want her children to adopt the attitude of taking things for granted.

“When my kids ask for a new toy / game, I encourage them to save on their allowance or earn money to satisfy their desire and then buy it with their savings,” said Bhatia, marketing manager at a company. pharmaceutical.

She added that this little wait to buy the game of their choice teaches them to delay gratification. They learn to plan, wait and manage the delay in fulfilling desires and associated situations, thus enjoying more excitement in receiving it.

She considers teaching children how to budget and spend wisely as an essential life skill. “We have a list of household chores that my kids can do to earn some extra cash from Dh5 to Dh25, like filling water bottles, cleaning their room, wiping dishes and tidying up, among other things. a monthly allowance of Dh50, allowing them to decide where they want to spend it independently. They save a huge chunk and invest in something worthwhile. “

Bhatia encourages children to invest their savings in gold or a fixed deposit and shows them how money is made up and how investments are made.

“We have a bank account for everyone where they can watch their savings grow. They give me their savings so that I deposit them in their account; we have a Microsoft Excel manual or journal to track that. They keep the deposit and withdrawal slips as proof (manual receipt book).

“Every Diwali [Indian festival], we also keep track of how much they saved, and then we fund an equal amount from our end. That way they learn that the more they save, the more they will earn, ”she said.

Dubai resident Roopali Suryavanshee Chauhan, the Indian mother of Avishi (12), said parents should speak openly to children about money matters and involve them in household financial matters suited to their needs. age. “Giving children a sense of responsibility by helping to make decisions would go a long way in making them feel comfortable making their own decisions. “

She started including her daughter in small financial decisions from a young age. “I started to explain to him how to price items against their cost. It started out with small items like the cost of a candy or a book, and over the years that evolved. to discuss bigger financial decisions. “

Like planning her next birthday party, where she is now learning to understand that she can invite a limited number of guests, as most children’s birthday venues typically charge per child. Plus, she has been involved in the overall cost of the holiday so that she can see the expenses and then decide which part she wants to cut.

“She often comes with me shopping, and now she understands how to check the price of each item before putting it in the cart. She can compare two similar items and decide based on cost which is more appropriate,” said Suryavanshee. , the co-founder of the digital marketing company.

“I also taught her that cheap isn’t always the best, and expensive doesn’t mean it’s good. So to make smart money decisions, she learns the cost versus the benefits and weighs depending on that. I let her shop for clothes where she checks the items and their cost before deciding if they are worth it. “

Avishi is at an age when his parents teach him to use a credit card when shopping. “The basic rule of credit card usage that we asked him to follow is to verify the invoice amount before presenting the card. Also, ask her if she can tap the card, rather than handing it over for a swipe and still taking the customer copy from the credit card machine and matching the amounts to the bill. “

“Impulse buying wasn’t a topic that was formally introduced to her, but I started telling her to ask herself this question before any spending – whether it’s just chocolate, clothing, or bigger products, ‘Is – what I really need this’, so use a credit card for only smart purchases.

“She is also exposed to banking work that might be necessary – such as paying a credit card bill. Teaching her savings is an ongoing process, but more than saving, her father begins to expose her to various tools. investment that can help grow money. “

Money can’t be a one-off talk; it needs to be part of the everyday conversation, Suryavanshee said. “As parents, we need to be patient and give children the opportunity to ask questions about money and help them understand money matters at their own pace.

“Every month my daughter watches me for the monthly budget expenses. I set aside money for the essentials like gasoline and non-essentials like nightlife, etc. She knows I am using one. prepaid card for all my purchases so I don’t have a chance of overspending in a month. I also taught her to check and select the items she wants and then try to wait and buy them when sales start to do good business. “

Dubai resident Yoan Joice Beatrix, mother of 3 daughters under 5, Mea (9), Ana (6) and Aya (5), said children are more grasping of everything they own taught from the age of 5. a crucial time for parents because as children grow up they tend to follow their own minds, ”said the Indonesian national, who works as a sales manager at an art gallery in downtown Dubai.

“As my children are small and cannot count, I teach them the motto we use. I explain to them how 25son + 25son will become 50son for my youngest children,” she added. “I also train Mea to save money for emergencies which she puts in her small purse in her schoolbag.”

All of her children have their own kitty, a shared kitty, and a small purse. “We gave them each a different kitten and taught them how to save the money that they sometimes get from loved ones or from my husband and me. They sometimes pool their money into a joint savings pot if they want something, which requires more money.

“At the moment they are saving together to buy a Nintendo Switch which costs around 1,200 Dh, but they haven’t raised enough money. So as parents we will add some money to give it to them in gift at Christmas Last year they were saving for a big dollhouse, which they finally got also at Christmas, which was around 400 Dh.

“We never give them expensive toys without saving them some money first, and of course my husband and I are going to throw in at the end. However, we want to teach them to be mindful of the things they want. and learn that it’s always important to keep money aside to satisfy their desires, ”added Beatrix.

“I always explain to my children that in order to make money, people need to work. This is why I sometimes give them a small task to earn money, which they will put aside in their piggy bank and from time to time, they will use it to buy things they like ”, a- she added.

“The money they can earn is Dh10 for every chore they do around the house like helping me do the dishes, put the clothes in the washing machine, hang out and fold the laundry, fix the bed ( pillows, folding blanket) etc. Mea can also help me with making hot milk and vacuuming etc. to earn money, ”she added.