Financial Planning is a concept most of us are not aliens to but it's still essential for us to teach children essential money lessons early in life which will hold them in good stead in the future. Let's take a look at 10 key values that you should pass on to your kids. 

Finance isn't scary; it isn't rocket science either

Unfortunately, a lot of people are intimidated by the prospect of financial planning, shying away from the associated jargon and seemingly befuddling workings of personal finance. Teach your children early on that money and numbers are not to be feared and personal finance skills can be learnt just like anything else, just as easily as learning to tie shoe laces or using a spoon to eat! Lead by example and involve your kids in your weekly budgetary planning or calculations of expenses. With numerous financial mobile apps and given how easily kids embrace technology these days, the job at hand is possibly easier than ever. An open, calm and eager mind is fertile ground for new learning.

The importance of saving

How often were we lectured by our parents about the "value of money"? A better way to go about it is to introduce young kids to the concept of saving. Show them the wisdom in putting aside a little bit of money every month to save for something they want. When they eventually learn to manage their pocket money, learning to strike that good balance between spending and saving wisely, they would have gained the skills to manage monthly budgets when they grow up.

Instant gratification is more the norm than the exception in this day and age. However, it's important to teach your child the importance of distinguishing between want and need (or just pure greed). Smart planning and patiently saving for major purchases will teach them the value of tactical planning and breaking down a major goal into smaller, actionable pieces that will ultimately help them reach that goal.

Hard work pays, literally

Try to teach them that it is hard work that will reward you. So try to make them work for a challenge and if it's met, reward them. This will teach them that money and gratification can come only with hard work.

Don't be a parasite

Of course, we all love to pamper our kids and provide the best for them. Nonetheless, it's important to teach them that they must learn to stand on their own feet at all times and not be dependent. Dipping into their parents' pockets should not be an option they take for granted. Similarly, teach them not to depend on a partner to fund them or take care of their financial planning or tackle their financial issues. They need to take charge, and equipped with the right financial basics, they can set themselves up for a stable, self-reliant future.

Never undermine the importance of an emergency fund

We hate thinking about negative possibilities in the future and just hope they don't happen to us. We hate even more having to tell our kids that every silver lining may just have a dark cloud. After all, why dampen their rosy dreams? While we shouldn't scare them by turning into doomsday prophets, it is important to keep it real for a child. Teach them the need to build a rainy day fund and how to go about building it. Having their own personal financial security will give them a sense of comfort when the going gets tough and they'll thank you for it.

Be disciplined

Discipline is important for any aspect of life. It holds true for financial dealings as well. That is to say never owe anyone anything, always pay your taxes on time, and ensure your financial books are clean. Inculcating this sense of discipline in kids will help them grow into sensible, responsible and very sorted young adults.

Have a neatly prioritized budget

Once your kids have mastered the basics of saving and spending, introduce them to budgeting. Show them your own monthly budget and why you prioritize certain items over others. When I lived abroad for the first time on my stipend salary, I learnt to start keeping track of my expenses and logging them on a daily basis. It helped me have a clear view of my books and alleviated the possibility of month-end shockers! Drawing on this experience, I feel that with the realization that there is a limited inflow of money within which they must accommodate all their needs, children soon figure out when to save and when to splurge. The added bonus is sharpened math skills!

Invest to get more

Most kids in India receive cash gifts from parents or relatives during their birthdays and festivals. When the accumulated sum is large enough, you can open a Fixed Deposit for your child and explain to them how depositing money for a certain amount of time will yield a little bit extra. Although investment instruments such as Mutual Funds are much trickier to explain to a young child, you can encourage him/her to keep tabs on the accumulating gift money and alert you when it reaches a certain figure.

There is joy in giving

Kindness is a quality too easily cast aside in our quest to build wealth. The joy of giving is an important lesson for children. Ask your child to make a list of the causes or issues they care about and donate regularly towards those causes. If you make a ritual of donating money to charity on special occasions like birthdays or anniversaries, you'll encourage an altruistic nature in your child. While the concept of 80G benefit under the Income Tax Act is a far reach for a young child, they will learn the simple lessons of saving and the joy of giving.

Be mindful of Credit Score and Credit/Debit Card usage

Before your children ship off to college, talk to them about the importance of a good Credit Score and how unpaid debt (in any form) could throw a spanner in the works for their financial health. You'll soon be the proud parent of financially responsible young adults!

Remember, children pick up most of their habits from their parents. This includes financial behaviour. They're never going to take you seriously if you preach to them about financial planning but are careless about money yourself. Leading by example with positive financial behaviour will help them see logic in your actions and they'll follow suit.