Mother’s Day Special: From ABC to SIP — how new-age moms make their kids money savvy

Another social media-savvy mother, Avantika Bahuguna, a 42-year-old entrepreneur from Mumbai, says that she has focussed on investment planning. Likewise, Roopal Bajaj, a 33-year-old from Assam, who shares parenting advice on social media, has also prioritised financial planning.

Plan ahead to achieve goals

Bansal says she employs a structured budgeting approach — she maintains a household expense account with the bank, jointly funded by her and her husband, and tracks expenses regularly.

Additionally, she has a separate bank account for UPI transactions, but it has a monthly limit.

Unexpected expenses can arise at any moment, especially when you have kids. Extra classes, tuition, or sudden family travel can quickly disrupt your budget. “To manage these, I have created a financial buffer — an emergency fund,” she says, adding that being aware of her spending  has helped her make planned financial decisions.

"We allocate a specific portion of our budget for special occasions like birthday gifts and parties, alongside our regular expenses," says Bajaj.

Prioritise building emergency funds

Build an emergency fund to cover at least three to six months of essential living expenses, including loan EMIs, rent, utilities, groceries, and childcare costs, to provide a financial safety net for unexpected events like job loss or medical emergencies.

Bahuguna and Bansal have set aside a portion of their savings specifically for emergencies. They ensure that funds are easily accessible and focus on investments that can be quickly liquidated.

“I dip into the emergency corpus only when it’s absolutely unavoidable,” says Bahuguna.

Learning to manage finances

Bahuguna shares that she used to be hands-off with her finances, relying on others for tasks like taxes and investments. However, she later realised the importance of taking control of money matters, and started actively managing her finances, discussing matters with her accountant, and tracking her investments. Becoming a parent further motivated her to be proactive and informed about her family's financial planning.

Bansal previously used a single bank account for all transactions, including UPI, but discovered that she was consistently overspending online by Rs 15,000-20,000 per month. “To curb this, I linked a secondary bank account specifically for UPI transactions, and set a monthly limit to ensure I stick to a strict online shopping budget,” she adds.

Also read | Planning for parenthood: A financial roadmap for new mothers

Share financial responsibilities

“My husband takes the lead on financial planning and research, but we jointly discuss and decide the investment strategy. We prefer to invest our savings in fixed deposits (FDs) and mutual funds (MFs) through monthly systematic investment plans (SIPs)," says Bajaj.

Similarly, Bansal emphasises that while her husband primarily manages investments, major financial decisions are made mutually, and she is always informed about where and how the money is invested. "We have short and long-term objectives, and invest accordingly, building a diversified portfolio that aligns with these goals," says Bansal.

Bahuguna is also deeply involved in financial decision-making, taking charge of most major investment calls unless they specifically pertain to her daughter or broader family matters.

Money lessons for kids

Bansal says she has tried to instil financial discipline in her seven-year-old son in a practical manner. She gives him a weekly allowance of Rs 100 and the cash gifts from grandparents and relatives, which he uses to buy toys, etc. She also teaches him to draw up budgets and stick to them. “This way, he also learns calculation  and makes informed decisions,” she says.

When it comes to financial discussions, Bansal says she avoids telling her kid "we don't have money," and instead uses positive language to encourage mindful spending, promoting healthy financial values in her child.

Bahuguna says, “My 13-year-old daughter has had an emergency fund since she was five. She saves a portion of her money each month and even consults me before making purchases. She is taking ownership of her finances, whether it's buying her own popcorn at the movies or saving up for a new book.''

“By teaching her the value of money and the importance of saving, I'm helping her become financially aware and make informed decisions that will benefit her in the long run,” she adds.

Bajaj says, "My 4-year-old son is learning the value of saving through a piggy bank, where he's accumulating money to buy a toy of his choice. I've also introduced him to engaging books that teach kids about money management in a fun way, laying the foundation for healthy financial habits from a young age."

Also read | Financial lessons to learn from your mother

Smart money moves for moms

"A common financial mistake mother’s make is overspending on their kids due to guilt or peer pressure," says Bajaj. Trying to keep up with others, whether it's through lavish birthday parties, trendy clothes, or excessive extracurricular activities, can put a huge strain on the family budget.

“Mothers should maintain the financial discipline of consistently contributing to the long-term goals and avoid unplanned expenses on the child,” says Shailendra Dubey, Partner, PlanMyEstate Advisors LLP.

“Once you have planned for your emergency fund, it is time to plan for long-term goals, which could include your child’s education and your retirement planning,” says Mayank Bhatnagar, Chief Operating Officer of Finedge, an online goal-based investment platform.

Mothers should be actively involved in the family’s financial decisions, something that many women ignore, say experts. And this is irrespective of whether they are homemakers or pursuing a career. By being part of financial decision-making and having a solid understanding of finance, mothers can not only manage their family's monies effectively, but also pass on valuable financial literacy to their children.