Investment fundamentals have changed dramatically in the last decade and going forward it will change more dramatically. The habit of savings needs to be inculcated from an early age. Charity begins at home hence education about savings and investments should begin from the early age and that’s too at home. Its significant responsibility for the young adults to teach their children about savings and investments from an early age. A habit of saving is very important no matter at what age you are. Today’s generation does not understand the value proposition of anything as compared to an earlier generation. The reason is that today’s generation lives on the edge of smart phones. The word Struggle has been replaced with comfort and this is the core area of difference between savings and spending habits of today’s young generation and old. Behavioral finance has a huge role to play in the society going ahead. The next decade is full of challenges for the parents provided proper steps and process is not followed to control the behaviors of the kids.
Today’s generation doesn’t have the idea of the pains through which their parents and grandparents have gone through to get better leaving. Today right from the childhood there is a competition wherein children are given expensive gadget and expensive lifestyle just to maintain the peer completion alive. Today’s generation does not understand the value of the money. There is no ideal age to inculcate saving habits in your child, but it can be taught slowly once the child turns five because, from that age, he/she begins to understand concepts of life. Their inquisitiveness should be used to educate them to understand the value of savings and investments which gives them long-term knowledge about wealth creation.
The various factors which can be implemented to educate & build savings habit are as follows:
Smartphone have changed the culture and competition among people. Building habits of savings are key to long-term prosperity in the family. Building the habit of savings and creating understanding for value proposition is always a difficult task provided with proper logics the same is understood to the children’s. Active involvements into household expense management will make these children avoid the traps of extravagant expenses. Peer pressure management regarding expenses is another spoiled brat ruling today’s society. This needs to be eliminated by the parents itself by teaching the kids about the value of money. Another factor which destroys the kids is lack of time being provided by the parents and replacing the same with money or gifts etc. This is another killing instinct which should be taken care properly. Parents cannot be the replaced by gifts or money or excess spending.
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