Financially Smart Kid
By: Sanjay'S Shortnotes
Tags: Wallet, Finacial Services, Kids, Finance, Kids And Tech

Do you really want to let your child think about managing finances when they are supposed to be cute and enjoy their welcome to the world?

Look at the image, if you still feels that childhood is all about cute little things then you will feel hurt after reading this note.

Life is harsh, you have to make it better and beautiful with your actions. Making right decisions at right time, better understanding of problems, doing hard work and chasing dreams could be few of those actions.

But we don’t realize that our life starts earlier than we thought.

Till 18 years or the time when we finished our high school — we are being taught that there is nothing wrong in this world. We had your mom-dad to look after all our problems (financially and emotionally) and suddenly at the age of 18, reality hit us. Now, we are expected to face the problems which our parents had never talked about — managing finances, handling work pressure, evaluating salary vs work etc. We were not even educated to understand those real life problems. The problems don’t end here, it is one of the reason of your bad mental and physical health.

One of the example is credit cards which becomes an essential part of everyone’s life. Millions of Americans are getting buried in debt, literally. Thirty percent of Americans firmly believe they are doomed to be in debt until the day they die [1]. The study showed that 65% of millennials are unsure they’ll die debt free, while 83% of retirees over 72 aren’t sure.

It could have been avoided if we were taught the value of monthly SIP or small investments, budgeting and working hard.

But soon, when we become parents — we repeat the history.

This is an endless loop, until you become Rich — Rich not in terms of money but your understanding on “How World Works?”. Teaching your child a little bit about finances won’t make them less cute. This won’t ruin them but they might thank you for teaching them the real skills to survive in this world.

Being financially smart is just one of such skills. You have to work day and night to make this learning smooth for your child to understand such a life saving skills. Some of the basic skills of managing finances are :

Want vs Need How task converts into money? Compare before you shop Understanding of SIP and Interest Rates. What is a credit? Risk & Reward Identity Thefts — Use of password Understanding Ledger (Debit / Credit) Budgeting for toys, snacks etc.

and the list goes on…

These are not easy topics to be taught and it requires continuous efforts from parents.

But I am hopeful that companies like PayTM & PhonePe should come with some kids finance management features into their apps.

You can checkout few solutions around Financially Smart Kid in USA like GreenLight Card For Kids but it may not suitable for India. So if you are an entrepreneur and you want to give it a try it would be worth trying to create an ecosystem around it.

Before I end this note, I would request wallet companies to give it a thought. It will surpass your expectation if executed properly.

Why Payment Giants like PayTM, PhonePe & Google Pay should care about this?

Kids Payment Infrastructure is not present in India. You get your first credit card from bank when you cross 18+ years and have a job. Ideally, parent should act as the first bank for kids to give them a digital credit card to learn about finances better at very minimum age (4+ yrs).

Rather small but it will become a utility for parents and game for kids to earn some pocket money.

A step towards moving away from credit cards and make monthly / weekly SIP a norm.

You can comment below if you feel otherwise or would like to understand more about it.