According to Investopedia, financial literacy is the “ability to use knowledge and skills to make effective and informed money management decisions”. It is an area that is often skipped in the formative educational system. As parents, it is your job to fill in the gaps.
Educating your kids to make wise money decisions earlier on will affect their finances in the long run. Consider taking these financial steps:
CONVEY THE VALUE OF MONEY
Encourage your children to absorb the value of money by using tangible examples. For instance, you may employ counting games for toddlers. Grab a pack of M&M’S and have your kids sort each one by color. Let them count how many pieces are available per color.
Once they can discriminate, introduce them to the different denominations of Singaporean money. The difficulty level of your lessons shall increase with their ages. Older children learn best with realistic examples such as an educational trip to the nearby grocery.
Take a conscious effort in providing them information about money. And, be ready to answer their countless questions. Children are innately curious after all!
SET THE RULES ON ALLOWANCE
The idea of giving an allowance is something that many Asian parents embrace wholeheartedly. While it can be a controversial subject, some experts believe that children can learn how to handle their own money by having allowance. Begin by making weekly allotments and cutting it short to bi-weekly allotments for preteens. Limiting the allotments will help your child to continually be challenged. They must think of ways to make their allowance last longer.
The next step is creating a budget with your preteens and teens. Sit down with your older children and enumerate their streams of incomes and expenses. Highlight the importance of distinguishing between the needs and the wants.
OPEN A CHILDREN’S SAVINGS ACCOUNT
What better way to teach your kid about the value of savings than by opening his or her very first account? Children nowadays were blessed with technology. This means that they can simply review their account balances and transactions online. Watching their account decline over time can instill wiser spending choices. While, watching the account grow can motivate them to save more.
Dwell on are the essence of withdrawals and deposits as well as the safety procedures of online banking. There are several local children’s savings account such as ePOSBkids Account and OCBC Mighty Savers Programme. Both do not require a minimum deposit.