Five top tips to teach kids about money management
Teaching your kids about money
When should you start teaching your kids about money and how do you introduce the different money concepts to them?
Learn how Dickie Wong, a finance professional, turns day-to-day activities into learning experiences for his pre-schooler daughter, Aika.
The first time when Aika was given pocket money, Mrs Wong wanted her daughter to differentiate between needs and wants and cultivate good money habits. Let's find out how Aika makes her financial decisions. Are Mr and Mrs Wong satisfied with her performance?
Dickie：We don't have to spoon-feed our kids. Even the younger ones know that they cannot get an ice-cream for nothing. They will have to use money to buy it.
Mrs Wong：Role playing is a good way for them (Aika and her little brother) to learn about money and spending. Let them play the roles of customer and cashier so they know what they should do in reality when they are in the supermarket.
To teach lessons in financial responsibility, discipline and good money habits, parents should take note of the following:
- The real deal
- Use real bank notes and coins to teach pre-schoolers about the different denominations. If you have children at primary school, you can educate them about electronic money, such as Octopus, ATM and credit cards.
- Learn from experience
- Give your children an appropriate amount of pocket money and let them decide how to spend it. Offer guidance, but don't control their spending. If they lose money or waste it, think of it as a valuable learning experience for your kids!
Help your children establish good money management habits with appropriate rewards. When they save regularly or keep basic accounts:
- Offer them rewards, such as bed-time stories, holiday activities and hobby classes. Let them know it is a reward and not automatic.
- Do not become overly dependent on giving cash rewards or expensive gifts.
- Use desktop and online games, or interesting activities, to encourage your kids to learn more about money management.
- Teach by example
- Children often copy the behaviour of others, especially their parents. If you look after your money well, then you are already half way there to passing on positive money management habits.
- Tell your kids that you work hard for your money to support the family and the importance of spending responsibly and saving your hard earned money.
- Inform them about essential household expenses, such as electricity, rent, water and so on and that you need to set aside money to cover such expenses on a regular basis.
- When working on the family budget, let your children observe, or even help out.
- Avoid arguing about money in front of your children. Face your financial issues with a positive attitude. Discuss with your children the family finances in an honest and realistic way, if you think they are able to understand money matters.