Financial discipline among children: If not now, when?

In today's fast-paced world, where consumerism and digital transactions dominate, teaching financial discipline to children has become more crucial than ever.

- ROHIT GAJBHIYE

Children are growing up in an ecosystem where targeted ads, one-click purchases, and digital wallets normalize spending without tangible exchanges. Amid this backdrop, the question arises: If we don't start teaching financial discipline now, then when? And how can we instill these habits in children still learning basic life skills?

WHY FINANCIAL DISCIPLINE MATTERS

Financial discipline is the ability to manage money wisely—saving for the future, spending within one's means, and making informed decisions. Research from the University of Cambridge reveals that money habits are often formed as early as age seven. These early experiences, whether through receiving pocket money or observing parental financial behavior, lay the foundation for how children approach money as adults.

Failing to instill financial discipline early can lead to detrimental consequences. Without understanding budgeting, saving, or thoughtful spending, children are likely to struggle with managing their finances in adulthood. In a world where credit cards and buy-now-pay-later schemes encourage instant gratification, financial literacy is not just a skill but a necessity.

WHEN TO START? THE EARLIER, THE BETTER

Many parents wonder when the right time is to start discussing money with their children. The answer is simple: As soon as children express an interest in money—whether by asking for toys or treats—they are ready to start learning its value.

For younger children, lessons can be as simple as understanding that money is exchanged for goods or learning to save for a desired toy. As they grow, more complex concepts like budgeting, differentiating between needs and wants, and understanding interest can be introduced.