As a father, you are a role model to your kids and you mean the world to them. Parenting is never easy and it never ceases to end. Children learn by watching and emulate what they see you doing. This way you have added responsibilities as they are learning even when you are not teaching them. Along with other things, you teach them how to manage money with what you buy, spend, save and invest. This Father’s Day, below are a few tips about financial literacy that you can teach your children early on in life.

• Budgeting – One of the important aspects of financial planning is budgeting. It teaches them to get a stock of the income and expenses and savings.  Ask them to budget their pocket money and aim at creating savings.
• Save and Plan – Budgeting gives way to saving. Inculcate the habit of saving from early on with a plan to save and also a plan on how to utilise the saving. Save First and Spend Later should be the mantra. Foolishly spending first and then realising that there is nothing saved will only lead to financial stress and debt later on.
• Debt – Showing them by example to live below your means, spending less than what you need will only help you not take on unnecessary debt. Teach them to avoid taking debt and if it is inevitable, to repay that debt at the earliest. Having high interest loans/debt can eat into your savings and upset your long term goals.
• Invest – Saving alone will not help, that saving has to be invested wisely. Teach them to start small and start early, starting early with even smaller amounts will help create larger kitty over time . Teach them the magic of compounding, how reinvesting the interest will grow over a period of time into a substantial saving.
• Long Term Goals – Advise them to have long term goals and work towards saving for that, they may be too young to understand but teach them that diversifying the investment in different asset classes will help reach the goal with less risk. Also, short term goals should not be neglected and planning and saving towards that too is essential.
• Emergency Fund – Life throws unexpected situations at us and the only way to deal with this is planning for the unexpected and saving for it. A portion of your income should be diverted towards an Emergency fund and teach them that this fund should not be disturbed for any other use.
• Financial Discipline – Show them that having a financial discipline leads to a less stress, if not stress free life in the future. Being honest to your plans and not deviating will help you teach them financial discipline and in turn make them financially independent in their life.

Review – Tell them the importance of reviewing financial plans at regular intervals. Needs keep changing and your financial planning also needs adjustments accordingly. Financial review at regular intervals will help you assess your income, current and future expenses and contingencies and make modifications accordingly.