Personal Finance

Money tales for children

Meera Siva | Updated on January 12, 2018


A working knowledge of finance is as essential for children as ethical values and social etiquette

Our children may aspire to be astronauts, scientists or entrepreneurs.

No matter what they become when they grow up — a computer whiz, talented artist, gifted surgeon or a competent lawyer — working knowledge of finance is as essential as ethical values and social etiquette.

But the challenge for parents is in familiarising children with ideas such as inflation and insurance, without boring them to tears with our usual rants?

There is really a dearth of creative ideas in helping children learn about essentials of money, in a fun and engaging way.

Enter Rupee Tales, a set of five illustrated children’s book from Zerodha, a discount brokerage firm.

The books target children seven years and older. The stories explain basic concepts such as savings, taxes, inflation, stock market and insurance.

The characters are everyday people that one can identify with and the situations are simple and familiar. The illustration is tasteful and appealing, making the reading experience interesting and fun.

Illustrating inflation

Take inflation, for instance. Prices of products and services going up over time is something we can make our children understand. This is the foundation for many other concepts such as supply and demand, interest rate and the need for savings.

The story of Mani, a cook in Bengaluru, is used to introduce this idea ( Mani’s money). The old lady he works for plans a birthday party for her grandson and buys goodies such as chocolate cake, toys and new clothes. When she casually mentions the price she paid for these, Mani is shocked; just six years ago he had bought these items at bargain prices.

He thinks someone had fleeced her, but she explains how prices go up over time and that is normal.

This fact gets Mani worried, as the cash he has been stashing in a bag under his bed may not be enough for the more expensive future.

Grandma explains the idea of getting money to grow and Mani decides to keep his money in the bank to earn interest.

No rocket science here, but the story repeats the price increase in different products — all of them of interest to children — to ensure that the point is made.

And rather than preach economics, it moves on to the practical question of how price increases can impact you adversely and what you can do about it. Putting aside money for a rainy day is another life lesson and a habit that can be taught early.

Savouring savings

The story of Anu and Annie ( Anu learns to save) shows how you need not sacrifice fun but still have some money for emergency. The two girls do small help for neighbours and are rewarded with eatables, flowers or money. While Annie saves a portion of the coins she gets, Anu spends it all. One day, there is a poor milkman whose milk is spilt by accident when the girls carry it. Annie offers to lend some money to help and Anu realises that she too must have saved to help out in times of need.

The beauty of the story is that no one preaches or chides the child for saving or spending. Anu, on her own, sees how her friend is able to rescue a person in distress using her savings. The comfort and possibilities that savings bring — to us and others — are brought out subtly.

Introducing insurance

Sufficient savings may not be feasible for many situations and some risk mitigation ideas are needed. Insurance is explained through a clever and time-tested story-in-a-story (one and a half stories) format, bringing old-world kings and jungle robbers along with car and health insurance.

A precious crown is to be made for a king, but there is the risk that a dacoit in the jungle may strike when it is transported. A clever lady suggests a deal to the goldsmith — deposit 20 coins and she will pay back the 200 coins it took to make the crown in case it is stolen. This backdrop is used to explain modern day insurance products, with a new product idea of toy insurance thrown in.

However, the story on taxes ( Vishrambu’s bus journey) is somewhat tedious with too many characters and tangential points. Likewise, a topic such as borrowing would have been more essential and simpler than trying to tackle the stock market. The concept is difficult, especially given the book’s target age group, and the story ( The cake shop) does not do justice to what it takes on.

Published on January 15, 2017

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