Children’s Day special: practical money lessons and habits to teach your kids

Talking about money with children can feel like a heavy conversation, but parents need not make it complicated. From rolling the dice in a game of Monopoly to colouring a progress chart for a new bicycle, simple activities can teach financial discipline more effectively than serious lectures or complex spreadsheets.

When festive cash gifts become savings projects and grocery trips turn into budgeting challenges, children learn to manage money through everyday experiences, often with little explanation. This Children’s Day, passing on financial discipline need not involve a formal sit-down conversation. It can start with turning daily habits into lessons that stay with children for life.

Supermarket lessons

A routine trip to the supermarket can double as a money lesson. “Going to the supermarket can become a game where they see milk, school shoes, chocolates, a new toy, and identify which items they want to skip to save money, and which ones they want to spend on," suggests Jinal Mehta, a Mumbai-based certified financial planner.

Categorizing items such as school shoes as needs and chocolates as wants teaches children to think twice before spending.

Festive savings

In Indian households, children usually receive cash during Diwali, birthdays and festivals. Instead of parents holding on to it or children spending it all, Mehta recommends turning the money into a festive savings project or challenge.

Deposit a portion of the amount into a piggy bank or a minor's savings account for a year. When the festival arrives the following year, count the savings together and add a small parent ‘bonus’. This gives children a visual demonstration of how interest works as they wait for their money to grow.

Learning through games

Dilshad Billimoria, a CFP and founder of Dilzer Consultants, highlights the importance of instilling money values gently during the formative years. She suggests an envelope budgeting system: allocate monthly budgets into physical envelopes for categories such as ice cream, savings and donations. Once an envelope is empty, spending on that item must stop for the month.

Another way to make money conversations fun is through games. Dilshad recommends board games such as Monopoly to introduce concepts of rent, loans, liquidity and risk.

Make goals visible

Waiting becomes easier when children have a clear goal. Mehta advises pinning a picture and the price of an item a child wants, such as a bicycle or a book set, on a chart. Children can colour in a section each time they save money towards it, buying the item once the chart is full.

This helps build the concept of delayed gratification and teaches children to save towards something they want rather than expect an immediate purchase.

Track the money

For older children, a practical starting point can be another supermarket exercise. Parents can give them a modest grocery budget and a shopping list, allowing them to compare brands, prices and pack sizes. This exposes them to real-world prices and teaches them to work within a budget.

Mehta also suggests maintaining a money diary in which children record their income and expenses, marking each entry with a smiley or a sad face to answer the question: ‘Was it worth it?’

As children reach their mid-teens, Dilshad encourages parents to take them to the bank and let them independently fill out deposit and withdrawal slips. She also suggests asking them to read, understand and summarise basic financial terms such as inflation and interest rates, and then explain these to their parents.

In a world where the gap between wanting and buying is shrinking, teaching children to pause, evaluate, compare and reconsider purchases is a valuable skill. Simple exercises can also introduce concepts such as interest, compounding and investing early in life.

This Children’s Day, give children the tools to understand how money works and how to make it work for them.