What is to be done on children's day...............

On Children's Day i.e. Sunday, here's a precious gift idea for kids -- start making yourself more financially responsible.

Given the increasing demands on our money and growing complexity about how best to use and invest it, financial experts suggest teaching children about the importance of money from an early age.

You should be  competent in managing their money when they grow up so they avoid big financial mistakes.

Experts say you should start learning about the value of money and savings even when you are young as five years old. The sooner you become financially savvy and wise investors, the better your chances of becoming millionaires by the time they retire.

Here are some tools to guide you. 

. Do what you say

Before you teach your youngster anything, make sure you follow this principle. You can't ask children to save and not demand very expensive toys, and then buy a very expensive mobile phone for yourself.

"One should lead by example," says L. Ravindran, a financial planner based in Bangalore. Remember, children learn a lot more from what they observe, rather than what they are lectured about.   

  

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School children in New Delhi on October 1, 2010.

 Saving

Ironically, children learn the importance of saving as a byproduct of their intention to spend.

Let them know that if they want that big teddy bear which costs 1,000 rupees, they're going to have to save from their pocket money. If their target is too large, you might want to offer to pay half, so that it feels achievable to the child.  

They learn that by keeping small amounts aside for a long time, they can buy big things. More importantly, you might be surprised to see that they don't want to buy as many things as they would if they were not spending their own money!    

4. Rewards  

One way to teach children the value of money is to make them earn it. You might ask your child to do a chore, say helping clean the living room, and pay a small amount of money for it. The child might have an incentive to add that to his or her kitty.

"It helps them to get motivated," says Mr. Ravindran.

You should ensure, however, that you reward only special tasks and not routine tasks like children keeping their dishes in the kitchen, or brushing their teeth. 

Open a bank account

Consider opening a bank savings account for your child between the ages of seven and 11 years, says Mr. Ravindran. After that, deposit the child's pocket money in the account.

This is a great way to make children more financially independent, as they have to learn how to run the account. Through internet banking, they can keep track of their savings and expenditure from home.  

More important, when money is in the bank, it's harder to spend, says Ujjwal Kumar, a 14-year-old student in Dehradun who lives in a hostel, away from home.

Mr. Kumar says there's a hesitation in going to the bank to withdraw money, especially for spurious things like buying chips or going to the market. 

Debit vs credit

who might be in college and live away from home, the living expenses can be quite high. But that doesn't mean that parents should give them a credit card with unlimited spending.

These children should ideally have a bank account of their own, with a debit card.

"The amount of money available there should be restricted to pocket money plus living expenses," says Mr. Dhawan, the Mumbai financial adviser.

However, in case parents want to allow their children to access a large amount of money in an emergency, Mr. Dhawan suggests giving an "add-on credit card."

This is basically part of the parent's credit card, and should ideally keep the child from overspending.   

 Investing lessons

Once children have become old enough to grasp basic money concepts, say maybe after 15 years of age, you need to explain to them the power of compounding and investing.  

One hundred rupees invested today will become 200 rupees in around seven years, if it earns a 10% compounded interest rate.

The stock market would likely provide much higher returns. If young men and women start investing small amounts of money periodically today, they can easily be millionaires by the time they retire! 

Obesity is assuming alarming proportions in the city. In a startling finding, it was observed that every third child studying in a private school in the city is obese. Government schools also do not fare any better. The survey, which was conducted by the Diabetes Foundation of India and National Diabetes, Obesity and Cholesterol Foundation (N-DOC), on schoolchildren, came up with the finding that Delhi has the highest number of obese children as compared to other urban cities, including Mumbai, Ahmedabad, Lucknow and Jaipur. What is worrisome is that obesity puts these children at the risk of developing diabetes and doctors say strict measures to control diet are needed to check this.

"In the last three years, obesity among schoolchildren has increased from 9.8% to 11.7%. What's more, the prevalence of obesity in private schools has shot up from 11.6% to 17%,'' said Dr Priyali Shah, the chief project officer of Diabetes Foundation. She said the chief reason behind this is imbalanced diet and sedentary lifestyle of urban children. "We conducted the study on 19,000 schoolchildren in Delhi 13,000 students were from private schools and 6,000 students were from government schools. While a total of 32.6% children from private schools were found to be obese, the prevalence of childhood obesity among government school students was 9.6%. We found that food intake of these children was almost four times the recommended quantity,'' Shah said.

According to Dr Anoop Misra, director and head, department of diabetes and metabolic diseases, Fortis Hospitals, obesity in such children is likely to continue till adulthood. "About 70% to 80% of these schoolchildren are likely to remain obese till they are adults. There are chances that these children may get diabetes in their late 20s or 30s,'' Misra said. He added that parents are primarily responsible for not paying attention to their children's diets. It is imperative that they take corrective measures to prevent the disease from turning into an epidemic. "Mothers should prepare a healthy tiffin and insist that the child has lunch in school. At home, parents must check what their child eats. Taking children out for regular walks during evening or after dinner can help in controlling obesity,'' he said.

Researchers said the tendency to eat out and consume junk food like burgers, french fries, pizza and the colas was seen among both government school and private school students. "Interviews with teachers as well as parents showed they had limited knowledge about saturated fats. More than half of them did not consider butter as saturated data or samosa as junk food,'' said one of the researchers. He added that schoolchildren are mostly involved in indoor games and 47% children played for less than one hour