5 ways to raise a financially prudent child
TEACH THEM TO BE GRATEFUL FOR WHAT
THEY HAVE If there is no gratitude, they will never be happy no matter how much they have, because they will always want something else or something more, says Keon Chee, co-author of Bringing Up Money Smart Kids.
Discuss the importance of making full use of the toys, books, games, gadgets and clothes that they own, and encourage them to share these items with their siblings. MAKE THEM AWARE OF THE VALUE OF MONEY “Explain the concept of money to them – how it was earned, the energy that went into earning it, and its potential and value,” advises Lee Cheon Loon of Executive Coach International.
“If you want to reward your kids with material goods, ensure that the reward is deserved. They must understand that they have to earn it and that it won’t just be given to them.
“This entails telling your kids what you expect of them in order for them to get that reward. But you will have to be strict about this – meaning that you cannot give in to your kids if they don’t hit the mark – otherwise you will erode the value of the ‘prize’.
“Another tip is to look for ways to reward your children that go beyond money or material things.”
DISTINGUISH NEEDS FROM
WANTS Jasveer Malaney, a certified money coach at Acquire Coaching, says that it’s also important to help your children make smart consumer choices from a young age.
It doesn’t have to be complicated. You can achieve this easily during a trip to the supermarket, for instance. This is also a good opportunity to teach them about budgeting.
“Do be open with your kids about money as well,” Jasveer adds. “If you picked up a deal, tell them about it. And as they grow older, you may want to have conversations with them about the economy, CPF savings, investments, shares, and so on.”
ENCOURAGE THE SAVING
HABIT Helping them understand the value of money extends to teaching them how to save, too. In addition to their bank accounts, get them money banks in which they can save their pocket money.
Teach them how to read their passbooks and how to use an ATM machine. Such basic lessons can go a long way in helping your children better appreciate their money so that they don’t end up spending it on frivolous items.
BE A GOOD MONEY
ROLE MODEL Above all, teach your children – by example – that success is not tied to material things and that long-term happiness is not to be found in a shopping spree.
Says Keon: “How much you have is but one measure of success, and it’s certainly not the most important.
“After all, Adam and I have met many wealthy folks who are not happy and have poor family lives.
“To us, happiness is the greatest measure of success, and kids should know that they can achieve this happiness, by being positive about their lives, finding their talents and strengths and looking for opportunities to use them. Finally, (happiness comes from) finding meaning in helping others around them.”