How to start teaching your children about money
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- 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 children can visually see the increase in savings.
Teaching your children 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 grow up.
Here are 6 tips on how to educate your children 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 your children that the items have to be paid for with money before leaving the shop. Let them hand the money over to the cashier to increase their awareness.
For school-going children, let them calculate the change they will get back after making payment for purchases. You can also let them have a go at choosing from different brands of the same item and using the price tag to teach them about choosing a cheaper brand or a higher-priced item with better quality
2. Introduce good money-saving habits
Good money-saving habits can be taught from young so that your children will inculcate a habit of saving before spending.
For pre-schoolers, you can start by taking out the different types of small notes and coins and teach them to learn and differentiate the value of the small notes and coins. You can also have a small piggy bank for them to deposit loose coins from your purchases.
As for school-going children, remember not to indulge your children by buying them everything they ask for. You can consider getting them to do chores to “earn money” so that they understand that money has to be earned from work. In addition, you can consider showing your encouragement by matching your children’s savings dollar for dollar.
You can also bring them to choose a piggy bank of their own to motivate them 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 use the savings to buy items that they desire instead of 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 money. This works for both pre-schoolers and school-going children.
You can help them to open a deposit account online, such as the POSB My Account for Kids and show them how to deposit the money from the piggy bank when it is full. Find out more about the key features to consider when opening a kids’ deposit account.
4. Saving up Ang Bao money
For pre-schoolers, cultivate a habit to let them pass their red packets to you for safeguarding and teach them how to count the Ang Bao money.
For older children, discuss with them how much of their Ang Bao money should be saved and advise them to save all or most of it. You can also bring them to the bank to deposit the money so that they know where their Ang Bao money goes to.
You can also explain that saving their money in a bank account earns them more money in the form of interest. This can be shown when you log in to their online bank account and highlight to them the interest earned. Make this a once-a-year affair as a way to help them realise how their finances have improved during the year – pretty much like what we all do!
5. Open your kids’ first deposit account online
To further aid in teaching them these important life lessons, consider opening a deposit account such as the POSB My Account for Kids. They can deposit their gift money received during new year and birthdays so that they get a head start in building up their savings.
Besides, 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. There will be a complimentary POPULAR 1-year student membership as well.
6. Use the POSB Smart Buddy
POSB Smart Buddy is the world’s first in-school savings and payments wearable on your child’s wrist. It lets your child tap to pay in school* and at selected merchants, check on balances, and track fitness levels.
Paired with a mobile app, you can instantly increase allowance and manage your child's finances on the go! You can also opt to automatically transfer your child’s allowance and savings into his/her savings account.
You can apply for the Smart Buddy payment chip(without watch) even if your child’s school is not with the program. Even without the payment card, the savings goal feature is still a useful tool to teach your child about saving money.
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.
*Find out about participating schools here.
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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.