Teaching your kids to save money may not be an easy task, especially in an age where consumerism has taken a hold on the population with products going at an all-time low due to globalization. Still, it is an important value to instill in your kids, especially when they are young, enabling them in the future. In Singapore, the banks are ever encouraging with their multiple schemes that allow your child to open accounts and providing them with all sorts of benefits such as free coin deposit, daily interest and even gifts such as a coin bank set.
1) Teaching Your Child, The Value of Money
Besides that, however, it is still essential that your kids understand the value of money in this world. Failure to do so will lead to them making really poor life choices that may threaten the way they live their lives. Starting from an age that may be as early as two, you may find your kids starting to question the source of their money. Once they start to do so, it is important that you explain to them that money doesn’t just appear from ATM machines “magically”. Bring across the point to your child that hard work is rewarded with money and not simply given to them by you. Try perhaps to get them to do some household chores or better still, teach them to generate income from selling their services or goods they make.
2) Teach Your Child to Save
Meanwhile, teach them to be frugal by spending only on things that are truly needed. You can always start by getting them a piggy bank or some form of money collection box with the goal of filling it up with money. As they grow older, you can then start introducing more ideas in them such as the difference between wants and needs, knowing when to spend money and save, as well as other tips to multiply their wealth. A common problem that many parents practice nowadays is teaching their children not to invest. The older generation especially may be set against the idea of “investing”, especially after the Lehman Brothers’ collapse which saw many elderlies losing their retirement funds. Of course, this doesn’t mean encouraging your child to start playing in the stock markets like a day trader. They have to understand that investment is an investment and not gambling. True, there will be risks involved, but more often than not, educated predictions and trend watching should yield results in the long term.
3) Never Give in Excess
Ideally, the basic concepts of how money is saved and spent should be cemented in a child by the time they enter primary school and further elaborated upon as they grow up. It is important never to give a child more money than they really need, just because you want them to save. This could go terribly wrong in more than one way especially if they lack the self-discipline at an early age. Start off slow and eventually get them to start working and saving for their own personal wants. Before you know it, your child would be ready to handle his own finances and possibly even be a better wealth manager than you.