A few years ago, I sat down with my friends to play a board game called Cashflow, based on the famous book Rich Dad, Poor Dad, by Robert T. Kiyosaki and Sharon Lechter.
As an adult, I am not as financially savvy as I should be. This has slowed down my personal and professional progress in more ways than I can explain. When I played Cashflow, something interesting happened. I could role play and actually learn how to invest without the fear of losing money. I could understand investment strategies and build positive money mindsets.
I was shocked to read a report by the Reserve Bank of India (All India Financial Inclusion and Financial Literacy Survey in 2019) stating that only 27% of Indian adults are financially literate. Without financial education, our kids cannot build their lives or move forward in any reasonable way. Money habits form early. Here’s what you can do to teach your kids these key money skills and habits.
Look for the right resources
Recently, BrightCHAMPS, an ed-tech platform that provides programs in coding, financial literacy, and robotics to K12 students, released a graphic novel, Money Lessons, which uses fun and exciting ways to teach kids about money. Money Lessons comes with an app that is available on Play Store and App Store. Meant for the 6-16 years age group, the book and the app build a child’s conceptual understanding of money and also give them opportunities to test out these learnings through games.
The book covers the evolution of money and how the world of money works. Children learn how to set financial goals, budget, manage expenses, and invest in and manage virtual money. They learn about interests, savings, and exchange rates.
The book and app are centred on two teen superheroes, Max and Ray, who take the child through interesting activities, games and real-life scenarios, and simulations. The content and curriculum in both the book and the app are vetted and approved by industry experts from India and around the world.
Bhavishya Chaurasiya, co-founder, FinCHAMPS by BrightCHAMPS, believes that structured, well-researched and age-appropriate money management programs are important to build financial skills among children and teenagers.
“Financial education is not included in school curriculum and awareness among parents is low,” he says. “Today, there are many financial influencers or ‘FinFluencers’ as they are called, who give incomplete information on finance, stock markets and cryptocurrency, and this can be dangerous. Parents don’t want to spend money on a program, the same money that they would spend on academic subjects."
Remember how that board game made me understand money better? Suddenly, abstract ideas and concepts became clear. Gamification is a great way to understand concepts and apply them in real life.
In the famous Stanford marshmallow experiment conducted in1972, children were offered a choice between one marshmallow that they'd get immediately or two marshmallows if they waited for a period of time. Children who waited or delayed gratification and resisted short-term rewards were found, years later, to be healthier, happier and more on-track with their goals. The ability to control impulses and aim for long-term goals is the cornerstone of learning how to achieve long-term financial goals.
You can use this idea in simple ways with your kids. When my daughter was a preschooler, she’d always ask for dolls in shops or malls. I’d ask her if she could wait till next time or for a week. At first, she would complain but soon she understood and learned to regulate these impulses. Interestingly, delayed gratification can help older children understand that they have to wait for a few years for their investments to get returns.
Talk about money and how to manage it
Most of us never talked about money in our families. We viewed it as a source of anxiety instead of a tool to do better things with our lives. As a child, my parents brought me up to play it safe with money and to not take risks. When I played Cashflow, I realised that I never even took calculated risks while my other players tested multiple scenarios, a process of trial and error that is equally important to understand money and grab hold of the right opportunity. We discourage kids from risky behavior because we want to protect them but we need to help them understand and identify risks and returns.
Says Ravi Bhushan, Founder and CEO of BrightCHAMPS, “Teaching kids about money is a no-brainer. This belief is strengthened every time I talk to some of my younger colleagues - so many of them are terrified of money, and embarrassed to ask ‘basic’ questions. As a father, I never want my son to feel helpless. And as an entrepreneur, I know that helplessness related to money is one of the most crippling anxieties of adulthood. Every kid is going to grow up to be an adult who will handle money in big and small ways. Why not give them the right tools to to achieve financial success and freedom by making their money work for them while the stakes are low and the mistakes are cheaper?”
Shweta Sharan is a freelance journalist based in Mumbai