Money-Smart Kids: Inculcating Early Financial Wisdom

Policymakers, parents and educators must equip children for financial independence

- Simarjeet Singh & Hardeep Singh Mundi

When preparing children for life, financial literacy is often neglected, though it is crucial for their future success and well-being. Instilling financial knowledge early fosters independence, confidence, and resilience. Parents, as primary influencers, shape their children's financial attitudes but must avoid passing down limiting money scripts—deep-seated beliefs that can be harmful.

Decoding money scripts: Unseen financial blueprints Money scripts are unconscious beliefs about money, often shaped by childhood experiences and family dynamics. Financial psychologists Brad Klontz and Ted Klontz, in Mind Over Money, identified four common types: money avoidance, money worship, money status and money vigilance. The scripts can strongly influence financial decisions, fostering unhealthy money habits. For instance, an overly frugal parent may instill a scarcity mindset, leading to financial anxiety. Conversely, parents who equate wealth with self-worth may encourage materialism.