Teaching your child about money
If you’ve only got a minute:
- Knowledge about money can be learnt through simple daily activities.
- Good money saving habits should be instilled from young.
- Get a transparent piggy bank so that your child can visually see the increase in savings.
Teaching your child about money matters from young can be one of your greatest gifts to them. Through simple everyday activities and leading by example, kids can learn the value of money and make responsible financial decisions as they progress through life.
Here are 6 tips on how to educate your child on money matters. Categorised into two different age groups, you’ll find simple activities for pre-schoolers from 3 to 6 years old and school-going children from ages 7 to 12.
1. Teach the concept of money through simple daily activities
Money knowledge can be learnt through engaging in simple daily activities.
For pre-schoolers, consider bringing them along with you for grocery shopping trips. Explain to them that the items have to be paid for with money before leaving the shop. Allow them to hand the money over to the cashier, and receive change (if any) to increase their awareness.
For school-going children, let them calculate the change they will get back after making payment for the items. Let them have a go at choosing from different brands of the same item and educate them on the importance of price comparison. This way, they can learn how to differentiate between selecting a cheaper brand and a higher-priced item with better quality.
2. Introduce good money-saving habits
By instilling good money-saving habits for your children at an early age, you can foster a positive mindset where saving takes precedence over spending.
For pre-schoolers, you can start by taking out the various denominations of notes and coins and teach them to learn and distinguish their respective values. You can also provide them with a small piggy bank where they can deposit loose coins from your purchases and start saving from an early age.
As for school-going children, it is important to avoid overindulging their every request by buying them everything they ask for. Instead, you can help them understand that money is earned through work by assigning them simple chores like tidying their rooms, or sweeping the floor and then rewarding them for the completed task. In addition, you can consider showing your encouragement by matching their savings dollar for dollar.
You can involve them in selecting their own piggy bank as an added form of motivation to save money from their daily allowance or other reward money (such as Ang Bao money from Chinese New Year red packets). Make it a point to explain that they can rely on their own savings to purchase items they desire instead of constantly asking from Daddy and Mummy.
3. Get a transparent piggy bank
It is best to get a piggy bank that is transparent so that they can see the money increasing and be more motivated to save. This works for both pre-schoolers and school-going children.
Besides have a piggy bank, you can also open a deposit account (POSB My Account for kids) for them online. Demonstrate how to deposit the money they saved from their piggy banks when they’re full.
4. Saving up Ang Bao money
For pre-schoolers, you can instill a routine that involves entrusting their red packets to you for safekeeping. Take the opportunity to impart valuable skills by teaching them how to accurately count their Ang Bao money too.
For older children, engage in open discussions about the significance of saving a substantial portion of their Ang Bao money. Encourage them to save all or most of it and explain the benefits of doing so. To deepen their understanding, you can take them to the bank where they can personally deposit the money, giving them a tangible connection to the process.
Additionally, take the opportunity to educate them about the concept of interest and how it can help their savings grow. Demonstrate it by logging into their online bank account and highlighting the interest they have earned. Make this an annual affair as a way to help them realise how their finances have improved over the course of a year.
5. Open your kids’ first deposit account online
To further aid in teaching them these important life lessons, you may want to consider opening a deposit account such as the POSB My Account for Kids. Not only can they deposit their gift money received during festive periods and birthdays, they also get a head start in building their savings.
In addition, opening this account offers various benefits for your child. Rewards include a $1 gift deposit, sign up gift (during promotional periods) and waiver of coin deposit fee until he/she turns 16. There is also a complimentary POPULAR 1-year student membership.Read more: Why open a savings account even if your child has CDA
6. Use the POSB Smart Buddy
POSB Smart Buddy is the official partner for e-payment across all Singapore schools, and the world’s first in-school wearable tech savings and payment program. Not only can your child use the Smart buddy watch or card to make contactless payments in school and/or at selected merchants, it also lets them check on account balances, and track their fitness levels.
Paired with a mobile app, you can allocate allowances, manage your child's finances on the go and set savings goals to track together. In addition, by linking you and your child’s bank account to the app, allowances can be debited within set limits and savings can be automatically transferred into his/her savings account.
If you and your child are existing users, you may want to level up their learning with the 5th Gen watch. It comes with enhanced features that can unlock better money habits.
Find out more here.
Starting the money conversation early and teaching basic money management skills can go a long way in your child’s life. It will be one of the best gifts from a parent.
Ready to start?
Speak to the Wealth Planning Manager today for a financial health check and how you can better plan your finances.
Alternatively, check out Plan & Invest tab in digibank to analyse your real-time financial health. The best part is, it’s fuss-free – we automatically work out your money flows and provide money tips.
This article is meant for information only and should not be relied upon as financial advice. Before making any decision to buy, sell or hold any investment or insurance product, you should seek advice from a financial adviser regarding its suitability.