Teaching your children the importance of saving for their future

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The concepts of money and saving money are not difficult to learn and children usually will begin to grasp the idea of money by the age of 3. As your children grow, it is important for you to teach them the value of money and how to save money for their future needs and wants. It is essential that the skills are imparted to your children while they are still young so as to ensure that they will be financially savvy by the time they grow up as an adult.

Here are some tips on how to help your children become financially savvy.

Teach them the concept of money at a young age

Money matters are important parts of growing up and you can be pro-active in teaching your children about money at a tender age. By the age of 3, they should already have the concept of money after observing you go through your daily activities. Begin to involve your children in handling small sum of money by getting them to pay for something in the supermarket or making them pay for their toys. Teach them to count the money correctly so that they understand the value of the bill that they are holding.

Introduce the concept of saving to your children

Around the age of 3, you can slowly introduce the concept of savings to your children by giving them a piggy bank and getting them to put money inside. You can get your children to “earn” money by paying them little tokens whenever they are well behaved or help out in the house. Show them how they can accumulate the money in the piggy bank and watch it grow. When it is full, they are free to choose something to buy with the money inside the piggy bank.

When they are about 6 years old, you can consider to give them a weekly allowance for school and teach them how to manage their own finances. Teach them the value of budgeting by encouraging them to put aside a little of their allowance as savings in order to buy something they love.

Introduce the idea of a bank account to your children

Once your children are well versed with the piggy bank and the idea of saving, you can introduce the idea of a bank account. Explain to your children what the bank account can do and how saving money inside a bank account is different from his or her piggy bank. Once your children are ready for the bank account, you can go ahead to open an account for them.

Choose the most suitable bank for your children

Most banks in Singapore offer a children’s account but the products differ from bank to bank. It is important for you to do some research and find out which bank is best suited for your children’s needs. You would need to check up on the eligibility and requirements of the bank, interest rates, account fees and deposits as well as any form of restrictions before making a trip down to the bank. Most importantly, do not believe in the advertisements without checking all the product offer completely.

Involve your children in the opening of the account

You can make your children feel responsible for the bank account by bringing them down to the bank and have the account open before them. You can even engaged the bank teller to speak with your children directly on the bank account details while you take note of what is being said besides your children. Once they feel the sense of responsibility, they will be able to better understand the concept of banking and savings.

Allow your children to monitor their own accounts

Before your children are old enough to monitor their own accounts, you should help them to do the monitoring as well as to deposit money in the bank for them. Involve them whenever you do the monitoring. Show them where the money is and whether that is growing inside the bank. Children will learn a lot about money just by monitoring their own accounts.

Teaching your children to save early in their childhood is essential to teach them about money and the value of saving. Exposure to the idea of savings will help your children to grow into financial savvy adults who value the act of saving for rainy days. It will definitely benefit your children in many ways and help them to grasp the idea of saving easily.

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