Recently Finance Minister Nirmala Sitharaman had a touching moment when a class 5 student asked her, “What’s the most important money lesson children should learn?”

She simply replied, “Before spending, save a part of what you have.” She got emotional when she was saying this. Her words had a mix of warmth and seriousness. Her motive behind the words was clear that she wanted to shape a child’s future.

Why Should We Advise Children To Save At A Young Age

When children take responsibility for money, it brings a sense of control and confidence. Even if they save a little, it teaches them big things.

• They start realising that every penny counts.
• They stop doing impulse expenditure.
• They inculcate delayed gratification and wait to spend instead of spending right away.

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How Parents Can Help Children Save Money

1. Give a small allowance and help them divide it. Let them spend some of it, and the balance to save.
2. Children receive money from relatives at times. Let them put that in a piggy bank instead of spending right away. Make saving a habit and not an option.
3. Celebrate their progress. When they save up for a toy, treat it like a win. It shows you notice their choices.
4. Talk about wants vs needs. Need is something we can’t live without whereas want can wait.

Remember how it felt to use your first savings for something special? That sense of pride stayed and it’s what Sitharaman tapped into.

She even suggested that instead of candy or toys, adults could gift a small contribution to a child’s savings.  

We don’t want to turn our children into financial experts. It’s about giving them a head start in understanding the value of money  and in their own capacity to make choices.