6 Ways To Teach Your Child Financial Literacy in Singapore
The life of a Singaporean kid is pretty fast paced. There’s school, PokeStops, tuition and tweets filling up every other minute of their lives. It’d be a shame if they weren’t educated about the one thing that fuels every necessity and perk in their lives – money.
Kids are still at that age to absorb a lot of knowledge, so there is no better time to teach them financial literacy than during their formative years. So here’s 5 ways to get them up to speed on the topic:
1. A Reward System for the Small Ones
Even a 4 year old could start off with this simple idea. Give the child a job to do, and for every task done, he gets a sticker or an item of incentive.
Think small on assignments – clearing the dishes, putting toys away or even helping with the laundry. Then reward him at the end of 2 weeks in exchange for the mini tasks completed.
File his achievements in a folder for him to take a look at from time to time. It gives him a sense of accomplishment and he’ll want to achieve more the next time.
2. Take Part in a Financial Literacy Workshop
MoneyTree Singapore is a financial education center that focuses on kids and teenagers. They organize day camps that teach kids how to save and manage money. Imagine an economic simulation where your kid is given imaginary cash and cards to spend, invest and save with.
The child who makes the most money at the end of the program gets to go home with S$200. Now that’s a real incentive!
3. Weekly Instead of Daily Allowances
When a child is given a weekly allowance, he’s forced to budget on a daily basis. He has to set aside money for transport, food and other necessities. Get your kid to write down his expenses at the end of each day.
This helps him know where each cent is spent. Go over his weekly expenditures at the end of the week. He’ll learn how to spend money wisely, and where to cut corners.
4. Explaining Cashless Transactions
Everyone seems to feel that cards are not a good idea. But it can be pretty useful in emergencies. Talk to your child about the pros of using a card.
There’s a recorded transaction in your bank statement. You don’t have to carry lots of cash as you travel. There’s even a redemption program on the points you earn as you swipe.
But don’t forget the most important aspect – teach your child the importance of making repayments on time to avoid unwanted interest and late payment charges.
5. The Concept of Investment
Let’s be truthful here – the interest in a savings account is not going to bring your deposit much value. If you want to teach your kid about investment, allocate a small amount of his money to invest for a low-risk financial plan.
The Singapore Savings Bonds, for example, only needs an initial start-up of $500. Get your kid involved in the registration process and guide him on its progress annually. He gets to see the money grow, and watching that happen at his age is really an eye-opener.
6. Decision-Making in Expenditures
Before you step into the Toys R Us, give your kid a budget of $50, and tell them to shop within the budget. If they have been eyeing something that goes beyond the budget, let them know that they have to roll it over until the next month when it’s time to go toy-shopping again and they will have double the budget.
The alternative? Go for something that’s within their budget.
Parents are also role models to their children in every aspect, and financial education is no less of a step. Chat with them on money decisions that make part of your family expenses. Their ears will be tuned to your voice and they’d even pick up an idea or two on money matters.
Simply because at the end of the day, it’s all about laying the facts on the table and helping your kid see the light in sound financial decisions.