7 easy ways to teach your kids to be money-smart
Learning the value of money is one of the key life skills that would serve our children well in later life. By instilling in them the basic concepts of financial planning and budgeting, they’ll be equipped with the knowledge to make responsible financial decisions.
Here are seven easy ways to develop smart money attitudes for kids:
1. Teach them the value of money
Which child hasn’t asked for the latest toy when walking through the mall? You could give in and buy them the latest and greatest, or alternatively, you could use the opportunity to teach your children the value of money instead. Guide them in setting aside a portion of their allowance to save for an item they really need, versus toys that they already have plenty of.
2. Set an example through role-playing
Games can be used to impart important life skills in a memorable way. Have an old Monopoly set hiding somewhere in the house? Use it to teach simple buying and selling. Or, involve your kids in roleplay – most children love to play make-believe; imagining themselves as shopkeepers or bankers. Through these simulations, your children can have fun while learning how to be responsible with money.
3. Use shopping trips to practise budgeting
Every once in a while, allow your kids to be in charge of choosing items for weekly grocery shopping. Provide them with a budget to spend on their favourite food items, and show them how they would be able to stretch their budget by selecting choices that are more affordable. You can also encourage your children to calculate any possible savings made from buying in bulk.
4. Give your kids opportunities to earn and save
As your children get increasingly familiar with basic financial concepts, you can start assigning them larger responsibilities to develop them further. Instead of a fixed weekly allowance, allow them to “earn” their allowance by giving them simple tasks to fulfil, such as washing the family car. By earning all or a portion of their spending allowance, the value of hard work becomes instilled in your children. For older children, encourage them to take up a part-time job (in lieu of an allowance) to reinforce the value of money.
5. Set a good example for your kids
Actions speak louder than words. For your children to develop the right habits, you should lead by example. When making household decisions, show your children how you are making conscious decisions in order to save. For instance, if you are replacing a worn-out appliance, walk your children through the decision-making process of why it may not be necessary to purchase a premium model.
6. Open your kids’ first savings account online
To further aid in teaching them these important life lessons, consider opening a savings account such as the My Account for your kids. They can deposit their cash gifts received during new year and birthdays, or earnings from their part-time jobs into their bank account, allowing them to experience a sense of financial responsibility. What’s more, your child will be rewarded with a S$1 gift deposit, sign up gift (during promotional periods) and waiver of coin deposit fee until he/she turns 16.
7. Let your kids save the fun way with POSB Smart Buddy
To help parents easily manage their children’s allowances, POSB has developed POSB Smart Buddy, the world’s first in-school wearable tech programme. With a Smart Buddy watch, students can make contactless payments at their school canteen or bookstore, making it is a fun way for children to learn personal financial management. You, as a parent, can easily manage your child’s allowance limit and monitor your child’s spending with a mobile app. All you need to do is get your child’s school representative to contact the bank to get the school powered up with POSB Smart Buddy.
Deposit Insurance Scheme
Singapore dollar deposits of non-bank depositors and monies and deposits denominated in Singapore dollars under the Supplementary Retirement Scheme are insured by the Singapore Deposit Insurance Corporation, for up to S$75,000 in aggregate per depositor per Scheme member by law. Monies and deposits denominated in Singapore dollars under the CPF Investment Scheme and CPF Retirement Sum Scheme are aggregated and separately insured up to S$75,000 for each depositor per Scheme member. Foreign currency deposits, dual currency investments, structured deposits and other investment products are not insured.