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This Could Be The Best Ever Diwali Gift for Your Teenage Kids.

Here's how you can gift prosperity to your children.

“Can anyone tell me about the new helicopter ride service? I want my son to experience it”

“Where can I find shoes with flashing lights?”  

“I am looking for exclusive but reasonable birthday gifts for my daughter’s first birthday”

I often see these messages being posted on dozens of moms groups on Facebook.I wonder that how, as parents, we don’t mind going an extra mile to spend for the best experience, the best of clothes, and generally the best education for our kids.

With festival season ads glaring at our faces every day, it just adds to the list of things we will be itching to buy for our kids and loved ones.

But how much time do we spend on teaching them about what it takes to afford a helicopter ride worth Rs 6000 or shoes with flashing lights worth Rs 1100 or so?How many times teenagers would really see the maximum retail price of a product before shopping at a grocery store or ask for the exact change to be returned?

Think about it.

In few days from now, a lot of us will welcome the goddess of wealth in to our homes. There can’t be a better occasion than this to tell our kids about the importance of spending and saving money, the right way.

I am not talking about the regular sit down lecture on how not to waste money.

I want you to tell stories to your kids.

Kids love stories- real life and reel life.

16 year old Mukund Choudhary, from Raipur district, has a bank balance of Rs 50,000. This saving is the reward money from quiz and competitions he has been winning over the years. And guess what? He hasn’t yet handed a big shopping list to his mom and dad for this Diwali, instead, he will be investing this money in mutual funds and a small portion of it in other instruments, along with his mom.

While 17 year old Sara Jain in Mumbai has been too busy with her medical exam preparation, to track how her savings are growing, her wealth manager father, Rajesh Jain ensures that a tidy sum is invested in her public provident fund account and a systematic investment plan in a equity fund every year.

By the time Mukund finishes his studies, let’s say in 7 years, he will be a “lakhpati” even before he starts working!

The value of his investment would have grown to a cool Rs 1, 06,400. Of course, I assume that his investment will grow at 15 % annually (an average return generated by a good large equity fund) and that he will not withdraw this money.  Even if he invests this money in a public provident fund, assuming it gives 7%, he may not end up a “lakhpati”, but he will have a decent amount -Rs 64,230 - as his savings.

Sara Jain would be equally proud of her savings once she completes her studies.

Similar to Mukund and Sara is this short video of One Idiot whereby a young boy shows the way to his elder brother about the power of saving pocket money and investing it too.

Your underlying message through these stories will be the power of compounding, a simple maths principle whereby a certain amount if invested regularly for a fairly long period of time, will multiply itself many times over, depending on where the amount is invested.

The idea is to introduce them to a saving habit in their teens in an investment vehicle you are comfortable with. It could even be a systematic investment plan of a mutual fund. It can start with the Diwali cash gifts they get from grandparents or family members. The icing on the cake will be the fact that there can’t be any bigger boost to their self esteem and pride than to realize that they can part fund their dream careers with their own savings!

About the Author: Rachna Monga Koppikar is the founder of thegreatgruhini.com, India’s first personal finance website that helps women navigate through the money maze.  

Having swam and mastered the treacherous waters of corporate and personal finance writing, she is now on a mission through her blog to make every Indian woman a Money Savvy Woman and a Money Savvy Mom!

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