Good Money Tips to Teach Your Kids

Kids will usually start receiving pocket money from their parents at the start of primary school, ranging from S$2-S$3 in the lower primary. This pocket money should be sufficient for them to spend on basic needs, with a little more to save and to give - a good starting opportunity to teach kids how to properly manage their money! This can be given in cash for the younger kids, allowing them to learn how to count the physical money or deposited in prepaid Visa cards like Canvas for the older kids who are more financially savvy.

Besides the basic pocket money, you can also provide opportunities for kids to earn extra money. This can include doing extra household chores or selling their used toys/books in a second-hand sale.

This shows them the hard work involved in earning money, thereby making them understand the importance of cautious spending.

Now that they have started to earn money, it is then time to teach them about saving and giving. Does your kid want a new lego set and is asking you for money to buy them? Teach them to save up themselves instead! You could set the target with them and work out a plan together on how much to save every day. In this way, they learn the important lesson of delayed gratification - working hard towards a goal and getting rewarded at the end.

You can start off with piggy banks or clear jars for the younger kids to save their money and later on set up a proper bank account for the older ones to manage.

And what about giving? Besides spending and saving, a third portion of money management is the emphasis on giving - even Elmo from Sesame Street said so himself! It is good to teach kids from a young age that money can be also used for helping others, and by setting aside a small amount of money for that purpose, children learn to be more appreciative of the money that they have. 

It is always easy to know where our money comes from, but we are sometimes clueless on where the money actually went. Learning to track your spending is a good habit to start from young and once that becomes a habit, you learn that you can easily manage your finances in adulthood.

For young kids, this can be done on a notebook at the end of everyday, taking out the remaining pocket money and documenting what has been spent that day. For older kids, a proper budgeting spreadsheet can be used for them to key in instead. Or to make it even easier, if they are given their allowance in a prepaid Visa card, like Canvas, all spending is visible and automatically tracked!

Children learn a lot more by watching how their parents handle money. It is no use teaching them about savings and prudent spending, while we spend extravagantly and living every month from hand to mouth. We need to model good financial behaviour first ourselves before the kids are able to develop their own spending and saving habits. (Read also: 6 Smart Tips for Managing Daily Household and Family Expenses)

Activities like setting a family saving goal, like a family vacation or a new flat-screen TV helps to let the kids see how you plan, budget, save and spend smartly. They will then likely emulate what they have seen into their own financial management and might even chip in towards that family goal!

With the above tips in mind, you can start your kid off to a solid start in financial management. Remember, these tips can also be taught through fun games like Monopoly, Game of Life too! Take the time now to tailor it according to the targeted age group and they will gain the necessary financial skills to guide them during adulthood.