Have you ever thought of why there are students who graduate from tertiary institutes not knowing how to manage the money that they earn?
Lack of financial education in schools and for the young by parents could possibly be the reason why.
In the Singapore pre-tertiary education system or most of the others all around the world, emphasis is placed on science, technology or the arts. The curriculum setting focuses on depth in these fields and hence would not be able to allow subjects like financial management or investing. Nonetheless, financial literacy workshops held in schools are on the rise. What is more important however, is how parents play their role to educate their children from young. It is critical that parents inculcate wise financial management habits in their children so that they know how to better manage their money that they earn once they step out into the working world.
Here are some tips we would like to share:
1. Basic fixed allowance over e.g. a week or a month enough to cater to your child’s required meals and other necessities but not in excess will teach them the preciousness of money.
2. Big ticket items and holidays as reward for hard work or plan it with your child in the basic fixed allowance by increasing it with a fixed daily savings plan for your child.
3. Let your child do the groceries paying at the cashier counter and when she is old enough (Primary 5 at least when % is taught), explain to her about how the GST is added on top of the sub-total bill.
4. If you are investor-savvy, educate your child by letting your child own a share of reputable listed companies under his name and teach them about how it can grow and might also depreciate due to business failings. (Recommended when your child is of certain age preferably above 12)
5. Borrow some money management books with interesting illustrations or share with your child personally your experiences and educate them about the importance of saving, investing wisely and the pitfalls of greed.
6. Last tip: Open a savings bank account for your child early!
Financial education for the young is important for the bright future and dreams that your children want to pursue. Start now and think about how you can contribute to your children’s financial literacy today!