The development and future of a country are determined by the proper understanding of citizens about financial discipline, both personally and socially. The latest programme of Good Cents by Union Assurance discusses how to develop financial discipline and financial well-being in a person through early childhood development, with Dr. Chaminda Weerasiriwardena. 

What is the importance of improving financial discipline for children’s future?

Finance is one of the basic elements of an economy. There is a very famous saying that ‘When you spend a dollar on raising a child, nine dollars are saved for the country’. A lot of research has been done on this matter, which means that the development of children is important to determining the future economic stability and sustainable economic management of a nation, and parents have a major role to play in this.

How should parents teach children to invest or instil financial discipline?

financial discipline

In many cases, awareness about financial discipline is done in society, but by giving children an understanding of this financial control from an early age, the child who becomes a citizen will be able to understand this task very easily. Although awareness of economic hardship and control of money exists in society, we do not see a relationship between awareness and implementation at the behavioural stage. Although people are aware of money management and investment, they are not practical in implementing financial discipline. Therefore, the main thing is to educate the child’s mind from an early age about how to manage money positively.

How important is it to educate children about lifestyle?

It is important to teach the child whether their needs and wants are crucial or not, especially in situations where young children are forcing their parents to buy all that they desire. In psychology, it has been provided that parents can give a systematic understanding of patience and manage impulses by practising the concept of delayed gratification. Children often try to get something by crying and scaring their parents when making requests. However, it is recommended that parents do not encourage this by immediately providing what the child demands. Instead, by delaying it, the child will be able to learn foundational skills in financial discipline such as patience and controlling their emotions. Through this training, we can recognise that understanding practical things like financial management can be done more easily.

What strategies can be used to help children understand the factors of financial control or saving?

Teaching something to a child through being angry will not achieve successful results while teaching children something in a peaceful and refreshing environment will lead to systematic learning in the child itself. Parents have a responsibility to introduce impulse control to their children in a stimulating environment without stress. Also, if children are not taught independence from a young age, they will not be able to make proper financial decisions in the future. Many young people have the problem of knowing how to properly manage their salary after receiving it. This condition is caused by a lack of independent decision-making ability. Independence leads to the development of qualities such as the ability to make decisions based on certain rational criteria and develop a strong concept of
self.

financial discipline

In developing financial literacy, some imperfections may occur through those parents. How do we prevent them?

Scientific methods have introduced ten detrimental situations in raising children. They have been introduced as adverse childhood experiences. It has been shown that having any three of the main elements can be identified as a high-failure environment.

  • Speaking in a way that damages children’s dignity
  • Physical abuse
  • Children watching parents fighting
  • Children witnessing their mother being beaten
  • The father is disordered due to drug use.
  • Not doing it where psychological treatment is needed
  • Absence or neglect of relationships between children in the family
  • Having a person in prison at home

A child is not able to maintain a good mental state due to the activation of the above factors. By reducing these conditions, through the foundation of maintaining a peaceful family environment, it will be possible to produce a person with a good personality and better aptitude to manage overall financial well-being as well.