SAVING FROM YOUNG
START THEM EARLY
Financial literacy is a critical life skill. Saving money is one of the most important aspects of building wealth and being financially independent. It impacts the child’s future retirement plans as well. Most people pick up financial skills from life experiences, albeit too late sometimes. CPD Singapore Education Services Pte Ltd believes that financial savvy skills should be taught from young.
This article will share some tips in that regard.
Start with a piggy bank
A piggy bank can be a great way to teach your kids the importance of saving, while giving them an easy way to do it. Tell your kids that the goal is to fill up the piggy bank with dollars and coins, until there is no room. Illustrate that the piggy bank is for saving money for the future and that the more they save, the more their money will grow.
Open a bank account
Once the piggy bank is full, take your child to the bank to open up a savings account for them. Have them count how much money is going to be deposited, so they can grasp how much money they have. Show them the final number and reinforce the idea of interest, even the principle of compound interest.
It can provide a great source of motivation for your kids if they understand that their money will grow over time as long as they don’t spend it.
Lead by example
Children learn by example, so the best way to teach your child about saving money is to save money yourself. Have your own jar of money that you put funds in regularly. When you are out shopping, show your children how to discern between various prices and explain why buying one item makes better sense than another. Reiterate the message that every time you get paid, you save a portion of your pay cheque to help prepare for the future.