Teach­ing chil­dren money man­age­ment

The Punch - - BANKING PERSONAL - Source: www.mon­ey­sense.gov.sg

Chil­dren learn best through ex­pe­ri­ence. You can teach your chil­dren the con­cept of money through ev­ery­day ac­tiv­i­ties. Taking the time to teach your chil­dren about money is prob­a­bly one of the best in­vest­ments you will ever make. After all, you try your best to se­cure a sound fi­nan­cial fu­ture for them; equip­ping your chil­dren with the skills to do like­wise goes one step fur­ther.

But teach­ing chil­dren about money man­age­ment is not merely telling them what to do. Chil­dren tend to learn bet­ter through ex­pe­ri­ence. So, it is a good idea to im­bue in them a habit of sav­ing by let­ting them use money boxes per­son­ally, or let­ting them han­dle money on out­ings.

Re­mem­ber, ev­ery­day ac­tiv­i­ties that show (not tell) the ben­e­fits of good money man­age­ment have a more last­ing im­pact!

Tips on teach­ing your kids about money:

•Start talk­ing about money

Chil­dren can start grasp­ing the con­cept of money from as young as three years old. As soon as your chil­dren can count, talk to them about money. Teach ba­sic money skills through sim­ple ev­ery­day ac­tiv­i­ties. Show and tell them what money is and what it can do. Make it fun!


if your preschoole­r thinks that money comes from the ATM, you could teach your child:

The ATM does not mag­i­cally dis­burse money

The money you draw at ATMS is con­sciously set aside by you, so that you can spend when you need to in order to set aside money, you need to work, and save

•Im­bue good sav­ing habits

A habit of sav­ing is an es­sen­tial skill you can de­velop in your child. Start early! Some re­searches show that money habits are set by the age of seven; with the big­gest in­flu­ence be­ing par­ents’ be­hav­iour.

Be­sides be­ing good role mod­els, how you pass on money skills should be tai­lored to your child’s age, and not just made sim­pler.

how much should they aim to save? What should they save for? These are ques­tions to bear in mind when you think of ways to show them the ben­e­fits of sav­ing.

The younger your child is, the shorter his or her at­ten­tion span will be. So if your child wants to save money to buy a toy, it should be at­tain­able within a short time. if not, the child may feel that sav­ing is a hope­less, end­less en­deav­our.

The sort of money skills your child is ready for de­pends on their age, and de­vel­op­men­tal mile­stones.


At two years old, your child can learn how to count and com­pare. At this age, teach your child to put notes in a money box (or any con­tainer for sav­ing money).

Al­though he may not grasp the con­cept of sav­ings, this will teach him to iden­tify money and the dif­fer­ence be­tween de­nom­i­na­tions.

if your child is older, talk about sav­ing goals and how long to save for an item. En­cour­ag­ing chil­dren to save for a few months to buy their favourite toy can teach them about pa­tience and de­layed grat­i­fi­ca­tion.

•Make the sav­ings ‘vis­i­ble’ if your child can ac­tu­ally see his or her sav­ings in­creas­ing, chances are, they will feel more in­clined to keep up the habit. here are a few tips to en­cour­age your child to save:

Use a clear jar in­stead of a money box

A clear jar en­sures your child won’t think that the money is “gone” since he or she can­not see it.

•Help your child ‘see’ the goal

Visual rep­re­sen­ta­tions are im­por­tant for chil­dren. Put up a pic­ture of the item your child is sav­ing for, and he or she will have mo­ti­va­tion to con­tinue putting money into the “bank.”

•Chart your child’s progress

Mo­ti­va­tion can also come from let­ting your child see his or her progress in sav­ing. A chart of which days your child saved, for in­stance, serves as a re­minder of his or her dis­ci­pline, and gives a sense of achieve­ment.

Match their sav­ings

if your child saves n50 a day, you can en­cour­age him or her by also con­tribut­ing n50 to his or her sav­ings. Be­sides serv­ing as a re­ward for your child’s ef­forts, it can also re­in­force the sav­ing habit and spur him or her on to save for fu­ture fi­nan­cial goals.

•In­tro­duce sav­ing, spend­ing and shar­ing

You could give your child four money boxes to show the im­por­tance of sav­ing for dif­fer­ent goals. have your child dis­trib­ute his or her al­lowance across these money boxes:

Sav­ing for money to be used later. Work on a goal to­gether and help your child save to­wards it

Spend­ing for money to be used soon

Shar­ing for do­na­tions to help oth­ers in­vest­ing for money to grow on its own. Take the op­por­tu­nity to open a bank ac­count for your child. Up­date the pass­book and tell your child about in­ter­est, de­posits, and loans

This ex­er­cise will help your child de­velop good money habits. And since your child has saved some money, an equally im­por­tant les­son is to let them make de­ci­sions on what to do with the kitty. Mak­ing choices, and bear­ing the con­se­quences are part of their jour­ney to mak­ing smarter fi­nan­cial de­ci­sions.

Your child will also learn to look be­yond his or her own needs and care for oth­ers.

•Know the dif­fer­ence be­tween needs and wants

With older chil­dren, in­tro­duce the con­cept of “needs ver­sus wants” to­gether with learning how to spend only what they save. Use ev­ery op­por­tu­nity to im­part this knowl­edge.


When you are shop­ping for gro­ceries:

•Show your chil­dren why some pur­chases are nec­es­sary while oth­ers are op­tional

Draw their at­ten­tion to the prices of items and how to com­pare high­light the ex­is­tence of dis­count coupons or weekly sales By do­ing this, your chil­dren will be taught that in spend­ing, we can save too. This will also equate to more money re­main­ing in their money box!

At their favourite restau­rant, ask your chil­dren to:

•Com­pare menu items and prices let them ex­er­cise their arith­metic skills by ask­ing them to add up the bill.

This will make your chil­dren more con­scious of the amount that they are spend­ing. En­cour­age them to de­ci­pher be­tween what they re­ally want and what they are sim­ply choos­ing on a whim.

•Show your child how to spend wisely

A great way to teach your chil­dren the con­cept of liv­ing within their means is to tell them that they can only spend after they have saved. if they are buy­ing a big item, they should save up for it.

When your chil­dren asks for some­thing in the store:

Ex­plain to them that it is not free, and some­one has to pay for it. Sug­gest that they use the sav­ings in their money boxes if they gen­uinely want the item.

Younger chil­dren will need visual rep­re­sen­ta­tions of the con­cept. So al­low them to see the money, hold it, pay for an item at the check­out counter, and re­ceive the re­ceipt along with the item.

•L-R: Deputy Director, Re­search and Strat­egy, Fi­nan­cial Re­port­ing Coun­cil, Iheanyi Anya­hara; a board mem­ber, Al Mu­niru Wam­bai; Executive Sec­re­tary/chief Executive Of­fi­cer, Daniel As­apokhai; Min­is­ter of Fi­nance, Zainab Ahmed; board mem­bers, Ah­mad Rabiu and Ade­wale Owolo, dur­ing a cour­tesy visit to the min­is­ter in Abuja… on Fri­day. Photo: FRC

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