Teaching your little ones Personal Finance

For parents, especially those with young children, the art of educating them on appreciating the value of what money can do has to start from young. Why so? Call it the beauty of youthfulness — the young, unmolded minds is the best time to inculcate good values and habits. This is the phase of life whereby they can easily absorb the best of what their parents can offer to them, and for parents to set a good example and role model.

Quite a fair bit of the adult population has trouble saving up each month. Personal finance, unlike family values, cultures, behaviours etc. is not something that is taught from generation to the next generation. And we haven’t moved on to investing yet. A fair bit of time in society is spent on teaching how to survive today; not tomorrow or even the long future ahead. The emphasis on survival for the future is always centered on a good education, a good job or setting up a good family.

However, the art of cutting down on expenses, living frugally and being thrifty, saving for a rainy day or even investing to make your money grow or last longer have to go hand-in-hand. I have always wanted to begin imparting personal finance education to my next generation. The only issue is I haven’t really put much thought into the long term lesson plan, which I am doing today.

For a young child, introducing financial concepts have to be fun, entertaining and interesting. They want to know what’s in it for them. When I was younger, my dad matched academic achievements versus monetary reward. The higher the grade attained, the greater monetary reward is given. Even schools recognised academic achievements with the Edusave award and scholarships. It isn’t like we had any use for the money back then (I didn’t spend it on material goods), but it feels good seeing your bank account increase in value.

I don’t have a clear outline, so I would probably spend quite a bit of time in penning out my thoughts.

To even begin with your child, one clear direction is to introduce money to your child. The first time that your child might possibly spend money independently by herself is in primary school. At primary one level, she would have to spend money on food during recess. Of course parents could introduce money at an even earlier stage, but minimally, the ability to count objects from 1 to 20.

We could start off with coins — $1, 50-cents, 20-cents and 10-cents. These are the most commonly used coins at her level. Similarly to make up $1,

Denomination	Number of coins to make up a dollar
$1	1
50-cents	2
20-cents	5
10-cents	10

And of course, the different ways to make up a $1, or for that matters, any amount below a dollar. To better appreciate finance-related matters, your child has got to be confident in numbers. You don’t have to be the best in Mathematics, but you definitely got to be reasonably sound with numbers, addition and subtraction. We would probably go more into details later on.

How did you get started for your child on money or finance-related matters?