We are lucky to be living in Singapore where most children do not need to struggle for basic necessities like those from other countries. Growing up in a comfortable environment, many kids here may take what they have for granted and not be aware of the value of money.
This is where it is important for parents to be conscious about how they are teaching and talking to their children about money. Since financial literacy isn’t something that is taught it school, the responsibility lies squarely on parents to inculcate good financial habits in their children. Beware of the mistakes below to ensure your child learn the right money values to carry them on through their lives!
With the low fertility rate in Singapore and high cost of raising a child, many parents look upon their children as their precious and may end up giving their child whatever they asked for. While there is nothing wrong with pampering your child, the problem comes when they do not understand the value of money. It is important to help them understand that money is made through work and effort, so that they know that whatever they have requested for was given to them through their parent’s effort at work.
You can help them realise this by making them “work” for what they want. For instance, wanting a new school bag when it isn’t entirely necessary can be gained through 4 weeks of bringing out the trash, or folding clothes. This will help them understand that they need to work for whatever they want.
Some parents may not feel very comfortable talking to them children about money, let alone rope them in on household budgeting. But remember, what you do will serve as an example for your child! It can be as simple as drawing up a grocery shopping list and keeping to a budget.
Show your kids the list and the budget you have in mind and have them follow you to grocery shopping. Teach them about choosing cheaper brands for certain goods and how it can help to keep to the budget. This simple exercise will help them make saving money a conscious effort and learn to come up with their own budgeting next time.
Let’s just say even adults are not spared from social or peer pressure. When all your friends are comparing notes on their latest luxury acquisition, or a Friday evening call from colleagues to go out for drinks, it is hard to say no or turn a blind eye to what’s happening around you and not be affected.
With our kids, you will inevitably face a situation where they come home to tell you so-and-so has just got the coolest new toy, or went on an awesome vacation with their parents which probably cost the family a 5-figure sum.
In situations like this, parents need to teach the kids that to compare with others will be a futile effort at happiness and that it is important to stick to what one can afford. Teach them that what’s on the surface may not be what it looks like beneath.
This one has got many parents guilty – giving your child an ipad or iphone so that you can distract them and have some alone time. Do you remember how the good old days were when you probably didn’t have many toys and of course not a smartphone? You probably spent time amusing yourself by going to the playground, reading books in the library or play-pretend with your sibling.
When you fill up your child’s time with toys, you are inculcating the idea that when they are bored, they should always look to buy themselves the latest gadget or gift for themselves. Instead of working on looking within, they start to look without.
So the next time your child complains to you about being bored, have a handy list of suggestions for them to spend their time – going outdoors, reading books, helping with the chores or doing something crafty to keep themselves occupied.
You might have your finances in order and pay off your credit card bills on time every month, but your kids don’t know that. What they see is their Mummy or Daddy bringing out the multiple credit cards in their wallets and swiping them at every instance.
Because they lack the knowledge about how credit card works, they may have the impression that credit is “free” and you can use it at any instance where you need cash. This will put them in a mindset where they should turn to their credit cards once they need to spend in the future.
You may want to tone down the usage of credit cards, at least in their presence, or explain to them how credit card works when they are older.