Here’s how you can raise your child to successfully master the financial aspects of life.

How to ensure your child grows to be economically independent?

Nurturing one’s offspring from infancy to adulthood is a task most parents execute with single-minded devotion. Newborn children are entirely dependent on their parents, but as they reach a stage when their minds are capable of grasping survival skills, it is time you set a different example. 

As the proverb goes about teaching someone to fish, teaching them a skill will last them a lifetime. And nowhere is this more valid than with financial education.

An early start

By moulding your child to be conscious of the financial transactions happening around them, they will grow into confident, financially savvy individuals. Children follow by example, and you as their primary role model are the one they are going to observe and imitate. 

Look at them as clay on which your actions leave imprints. This is not a burden; you don’t have to constantly watch your every move in front of your kids. You just have to adopt some methods that will help you impress on your child the basic reality of how money works.


Raise them to have ambitions, to keep an eye out for scholarships, to be aware of the different fields of learning and skills they can attain. Instilling in them a healthy respect for what they learn and what they can achieve with that learning will have them remember their lessons better. Enrolling them into a few tutorial sessions where they can get a feel of diverse subjects will help them understand their own interests and abilities.

You can also take out an early investment on their behalf. A savings bank account, PPF, equity funds etc. will build up to a desirable corpus over time and help boost your child’s chances of funding for higher education or their startup ideas.


Broaden their perspectives regarding income sources. In the current economy, traditional sources of income are not the only options. Encourage your child to pursue diverse interests, which in the future could lead to alternative sources of income. 


Encouraging charitable acts develops maturity in your children; they become less absorbed with themselves and find a different kind of fulfilment in helping others. Donating to a particular charity can motivate your child to save and teach them to quell impulsive desires in favour of more altruistic ones. 


Include your child in the basic aspects of financial planning. Having a family session where you go over household expenses, budgeting, transportation costs, and travel plans introduces them to the way money should be managed and efficiently handled. This exercise also helps you understand how the minds of your children work.

When out shopping for groceries, find ways to let your child participate by assigning them small tasks. Develop their potential by having them purchase things within a fixed budget. This will ensure that your child gains experience in being economical by focusing on a task and getting a taste of responsibility. To reduce frivolous spending habits, rationalise your purchases so they follow your example. 

Work ethics

Allowance or pocket money is another way to teach them responsibility. Start small with piggy banks where they can save coins and then up your game. Have them separate their allowance into disposable income and savings, and offer to match their savings amount to motivate them further. 

By inculcating the habit of saving at an early age, your child matures faster financially and is more likely to value the purchases they make. And in the future, they are less likely to squander money from the investments you have set aside for them.


Have them help out with chores in the house. Being able to cook and clean will ensure they are not dependent on others when they start living away from home. When they start going to college, work with them on budgeting their allowance between food, rent, and other expenses. Agree on a specific date on which you will send their allowance so that they can look forward to it and plan accordingly. 

Budgeting thus becomes a habit. During your children’s college years, encourage them to take up internships and part-time work, as this will help them gain insight into different professions and hone their skills while teaching them to manage their time efficiently. Earning on their own will teach them a healthy appreciation of money and will make them practical spenders.


Make sure your children develop the habit of ensuring basic security for all their finances, their bank accounts, and card transactions. As young adults, knowledge of the financial basics is necessary to navigate the economy independently. They should be aware of the basics of tax, financial tools such as automatic bill payments, mutual funds, and the stock market.

Teach them the difference between good credit that goes into education and skill development and bad borrowing. It is easy to swipe one’s credit card for purchases but less so when one considers having to repay the amount at the end of the month. You can provide an early example of how a loan works by lending them some money and fixing an interest to be paid off with their pocket money, and having them see how it works.

Last words

Introducing the financial side of life to your children at an early age leaves a strong imprint on their minds. You will be teaching them to accumulate wealth, no matter what job they take up in their lifetime. And by the time they reach young adulthood, they will be ready to face life’s challenges through the habits you have inculcated in them. 

Your aim should be to raise your children as dignified individuals who can shoulder responsibility and account for their actions, have a strong work ethic, and are self-sufficient. This way, twenty years down the line, you can enjoy a peaceful retired life of no compromises, having equipped your child how to navigate the financial reality of the world they live in.

How I did it

Rahila Khan

I am a single mother of one. I lost my husband just 5 years into my marriage. Life has been a struggle for me, but I have managed it and today I have no complaints. 

I was a young widow with a 3 year old son when my husband passed away due to a heart attack. My parents were my rock… Read more

Piya Sharma
Chartered Accountant

I am a CA by profession. As my training has taught me, investing is a big part of my financial strategy. I am slightly risk-averse and invest heavily in mutual funds, FDs and ULIPs. I stay away from the stock market. 

As the household expenses are taken care of by my husband, I use most… Read more

Rajesh Singh
Corporate Executive

Growing up I did not have much other than the bare necessities. Though my mom tried her best, she could not fulfil our wishes. I always knew I had to study and improve my life. Today, I own a bike, a car and my own humble house. This has only been possible because of my prudent wife.

We… Read more

Suraj Chandwani
Gas Station Owner

I like to work hard and live a good life. I want to give the best to my wife and son, as well as my parents who live with us. I own a gas station in the suburbs of Mumbai. I had taken a loan to set up my business. So a major chunk of my earnings goes in repaying the loan. I also have a car loan… Read more