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All parents want what is best for their children. This is not necessarily the latest tech device or coolest toy, but equipping them with the foundation to be happy, fulfilled, resilient, kind, safe and successful in life.
Teaching children about financial literacy and money is a fundamental lesson that every child should learn. It’s about helping people make well-informed choices and encouraging financially responsible behaviour. There is plenty of evidence that proves that people who are financially literate are more likely to succeed in life.
Research shows that many of our financial habits are set by just seven years old*. But how many schools offer a comprehensive financial education curriculum at this age? Financial education needs to be a practical application in our daily lives, rather than just understanding theories. It’s far more powerful to learn through life lessons than a textbook.
Being a parent to three boys, I’ve overheard many conversations between my kids and their friends and felt shocked at how often the topic of money comes up – and not always in a positive way.
My son recently came home in tears as he was called ‘poor’ because we didn’t fly business class on a recent holiday to Sydney. This called for a family discussion about money. I started off by explaining how privileged we are to have a roof over our head, food on our table, and the fact that we had just travelled to Australia at all. We enjoyed quality time with cousins and grandparents, long days on the beach and at the park, and ice cream every day. We spoke about values and what’s really important to us as a family: flying business class is not on our priority list. But how do you ensure positive financial beliefs are ingrained at a young age? Here are some useful tips and strategies:
Create opportunities
Everyone values money more when earned than received. This can be through doing chores around the house or via a reward system for completing certain tasks or achieving milestones. Nothing beats some healthy competition to earn extra points and bonuses. My son even once asked for a ‘salary increase’.
Place value on experiences
For birthdays and special occasions, I don’t give gifts and instead let my children choose experiences that we can enjoy together as family. Giving another plastic toy is soon forgotten, but my sons often talk about the experiences we shared and they always look forward and feel excited when planning their next birthday adventure.
Encourage a saving habit
Children love watching their savings jar grow. The simple act of counting the coins and seeing the jar fill up is truly satisfying. Saving helps children to set goals and plan for things that they may want to purchase in the future. Learning to save isn’t just an essential money habit, it teaches discipline and delayed gratification, too.
Give children a budget
Giving children a budget helps them to make choices and decisions, and also prepares them for the real world. I recently gave my kids a budget to buy their friend a birthday present. They had so much fun running around the toy shop working out the price of items. Should they buy three smaller gifts or one large gift? They spoke about what their friend would really appreciate and when they had change left over, they bought a birthday card. It was a long but productive morning.
Educating your children about personal finance is a lifelong lesson. If you consistently put in the effort and communicate a clear message about money, you will instill good habits that will serve your children well. That’s what I call a good investment!
Contact Batya at Select Investors on Batya.shulman@sjpp.asia or +65 96268576 to arrange a consultation for you and your family’s financial future.
The ‘St. James’s Place Partnership’ and the titles ‘Partner’ and ‘Partner Practice’ are marketing terms used to describe St. James’s Place representatives. Members of the St. James’s Place Partnership in Singapore represent St. James’s Place (Singapore) Private Limited, which is part of the St. James’s Place Wealth Management Group, and it is regulated by the Monetary Authority of Singapore and is a member of the Investment Management Association of Singapore and Association of Financial Advisers (Singapore). Company Registration No. 200406398R. Capital Markets Services Licence No. CMS100851. St. James’s Place Wealth Management Group Ltd Registered Office: St. James’s Place House, 1 Tetbury Road, Cirencester, Gloucestershire,GL7 1FP, United Kingdom. Registered in England Number 02627518.
*Source: Dr David Whitebread & Dr Sue Bingham (2013) Habit Formation and Learning in Young Children
