QuestionChildren's Learning & Development
I want to introduce the concept of money to my child. How can I teach my child the importance of saving?
What the Expert Says
By Brandon Lam
Executive Director, Singapore Head of Financial Planning Group, Development Bank of Singapore (DBS)
Bachelor of Finance, Bloomington Indiana, USA
Vast Experience in various financial institutions handling insurance and investment products
While most people understand the importance of managing finances only when they were older or when they started working, it will be great if parents can actually prepare their child about saving during their childhood.
Here are some suggestions to introduce this important concept to your child.
Use Different Containers
This is an interesting way to teach your child about achieving goals of different terms (short and long term). For example, use a big jar to contain savings for an overseas trip and a smaller container for shorter-term goals like saving up for a toy. Get your child to draw the labels for each jar.
Draw a Savings Chart
Once your child has identified his savings goal, you can help him make a chart. First, divide the savings goal into steps. For example, if the savings goal is S$50, divide it into 10 steps so that every time he saves S$5, he can place a sticker. This way, he can see himself getting closer and closer to his goal.
Using the savings chart, you can reward your child if he saves more than the intended amount or reaches his goal earlier than planned. Simple rewards can be an ice cream treat or extra half hour of TV time; or you can even match the extra savings as a ’bonus’.
Be a role model
Take the opportunity to show your child what it is like to save money when they grow up. You can use iBanking or your savings passbook to explain the benefits of saving in a bank account, such as security and interest earnings. It will inspire them to keep up with the good habit of saving later in life.
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