Here’s how you can teach your daughter to reach financial freedom

However, as parents, you must imbibe key monetary and investment lessons in your daughter for her to embark on her journey to financial freedom and be in command of her finances. How can you do so? Let’s find out.

Women are habitual savers. You can take the quotient a notch higher by inculcating a savings habit in your daughter from an early age. Encourage her to save from her pocket money every month for anything big that she might aspire for in the future. You can give her a piggy bank where she can make her deposits.

Incentivize savings by setting a target fulfilling which fetches her a reward of some sort. You can also open an account in your daughter’s name in a bank and ask her to deposit her money in it. Today, many banks offer kids’ accounts for minor children.

Also, as per RBI rules, minors above the age of 10 can independently operate a savings account if they so desire. A kid’s account is a good way to introduce your daughter to basic banking operations.

Once your daughter gets the hang of the common banking operations, and as she turns major, the next step is to make her familiar with investments that compound money. A recurring bank deposit is a good beginning as it serves twin functions – save and grow.

In most cases, a fixed amount after getting deducted from the primary account is deposited in the recurring account that earns a nominal interest. Once your daughter sees her savings going high, you can introduce her to other instruments like mutual funds and stocks that are market-linked.

Systematic investment plans (SIPs) in mutual funds work on similar lines like a recurring deposit, except that your money is invested in mutual funds that have the potential to deliver higher returns in the long run, particularly equity funds.

Equally important is to make her understand the working mechanism of different instruments and the associated risks for her to take prudent calls.

Along with imparting knowledge on the various financial tools, it’s essential for your daughter to know her rights. For example, a recent Supreme Court ruling says that daughters have a right to parental property.

Similarly, she has rights over 'streedhan', which is her exclusive property. It includes voluntary gifts given to her before, during, and after marriage. A woman can’t be denied of her 'streedhan', and doing so would be a part of economic abuse. These are among the many rights that a daughter has, and it’s vital for you as a parent to make her aware of them.

To make your daughter financially independent, encourage her to participate in the family’s financial decisions. Seek her opinion which will make her more confident going forward.

Involving her in monetary matters will help break the ice and give your daughter the confidence to take independent decisions in her life. At the same time, she will not hesitate to voice her opinion and make it count.

Financial freedom is your daughter’s right and you, as a parent, have a huge role to play in it. With the right approach and mindset, you can help fulfill this all-important goal without hiccups.