Your financial plans change on the day you discover a child is on the way. But are you equipped to understand child psychology and its impact on your financial planning for life?

Let me tell you about my first brush with an indisciplined, not-so-money-savvy kid.  My 12-year old niece moved from a small town to a school in Pune. We happened  to be her local guardians. She first observed that we get things free, since we don’t pay in cash, but just swipe a card. The next issue started with never-ending demands and brusque remarks about getting the money from her Dad.

The child is not schooled to be money savvy. And it adds to the problems of all those who associate with the child. Isn’t it a familiar story we ‘ve heard at some point in life?


Our social and educational system does nothing to prepare us for parenting. It explains the rise of umpteen parenting courses springing up. It’s happening more so after the pandemic. Parents are now compelled to deal with the kids for 24 hours, without support from teachers, tutors or daycare facilitators.

We will only talk about children and money here.

I summarise the parental mindset in five bullet points.

  1. They are too young to understand financial problems. Why burden their childhood?
  2. I don’t want my child to go through what I did in early years.
  3. We need to keep up with the Sharmas or Shahs or Shetty’s.
  4. I can do anything to see my kids happy.
  5. They will never forgive me, if their future is compromised for a small problem of mine today.

This is short-term thinking, and under-estimating the capacity of a child to learn. The problem is we don’t take the trouble to teach them life skills. They are too busy learning school subjects and indulging in trendy pastimes.

A common thought process

A child’s future is compromised, if you don’t have enough money to pay for expensive courses today.


A child’s future is compromised if you don’t have enough money saved for their future, or if the children don’t know how to handle money.

We hear of celebrity kids taking a bus to school or college. The parents make them experience an average life, before they get swept away by glamour, fame and wealth.

Let success happen at its own pace. Meanwhile, teach them to work for the best, and be prepared for the worst.

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1. Understanding the Money Cycle

Money is not just about spending. It goes through a cycle of Earn, Spend, Save and Invest.

2. Immediate gratification is a spoiler

Marshmallow Test
Marshmallow Test

The Marshmallow Test kicked off the studies on emotional intelligence. You tell a kid they can take one marshmallow now, but they get two if they wait for an hour.

The ones who had the patience to wait showed better progress as individuals in later years.

3. Planning is crucial to success

One needs a plan to spend money, as much as it is needed for scoring well in exams or winning a match.

4. Budgets and Value of Money

Resources are limited. Wants are unlimited. One has to choose between two things at times. The choice is based on comparative value of those things.

Budgets are based on what is needed immediately, and what can wait.

5. Peer pressure

Peer pressure is a strong reason for indulgence. They feel compelled to have what their friends have. Do they ever count what they have, but their friends don’t? 

Counting your blessings can be a huge influencing factor.

Successful people set their own rules.

Are you ready to take your kids through a journey of financial awareness and literacy?

Stay tuned for more.

Keep a watch on MoneyGoalz Videos, where we keep you updated about future programs.

Download the ebook Decoding Money Habits to know how spending behaviour has its roots in childhood.

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All the best!

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