MONEY IS NOT ONLY ABOUT FINANCE, BUT CAN ALSO CONNECT PEOPLE EMOTIONALLY
Its often said that a person would treat financial matters or money matters in a way that he/she had learnt during childhood from his/her parents. So financial planners and advisors say that it is important for parents to teach their kids how they should handle money by demonstrating with examples. One of the main teachings that everyone should learn is about the value of money with time. Money possesses different value at different point of times. For example, Rs. 100 in your pocket when you have enough money may not be very high in value, but on the other hand if you are going through cash crunch then the value of Rs.100 would increase. This criteria applies to almost everyone: a child, a salaried person, businessman, retired parents and others.
Value of money changes with time. So its very important to differentiate between needs and wants so as to put your money to the best use and to derive maximum value from it. According to some financial planners, if you want to buy something, give yourself 2-3 weeks time before you actually buy the thing. Within this time, if you are able to do without the thing that you want to buy and at the same time you are quite comfortable, then the thing you want is not a need but a want. Parents should teach this difference to their kids. The value of money goes up for a retired person as they have limited income. According to us, at this juncture, giving them something they require could strengthen the emotional connects between parents and their children. Lately, mutual funds have come up with a solution for working people to set up a mechanism so that if they are unable to transfer money to their parents account on time, due to their busy schedules or any other reason, they need not worry.The fund houses, through technological innovations in the banking space, can take care of the same Here, the investor has to first invest in mutual fund preferably in a MIS (monthly income scheme) and then give a mandate for a systematic withdrawal plan (SWP) mandate to the fund house. While the investments are in the name of the working person, the money withdrawn at regular intervals through MIS or SWP would be transferred to parents account at pre-fixed intervals. So it will solve the dual purpose of building wealth as well as emotional and financial satisfaction among parents. In the currently changing social structure where nuclearization of families is on the rise, such a plan could strengthen the emotional connect with the family.