SingaporeMotherhood | Parenting
Family Finance with Ruperto: Kickstarting My Kid’s Financial Journey
The ages from three to eight represent a critical period for learning and development. During this stage, children consume information relentlessly and indiscriminately, much like a vacuum cleaner. Hence, we need to be mindful and purposeful in our interactions with our young ones. The path they choose is uniquely theirs and all we can do is provide guidance, whether good or bad.
Cultivating the ability to manage one’s finances is a valuable virtue and skill that weaves itself into all facets of life. As a parent of a seven-year-old and a four-year-old, I am dedicated to steering my boys towards developing a healthy view of money and its uses.
Chinese New Year Ang Pows
As a half-Chinese myself, I grew up celebrating Chinese New Year and like every child, looked forward to the season. That’s because it means receiving a lump sum of money, of course. So this past CNY presented the perfect opportunity to jumpstart this lifelong journey. However, the method had to be age-appropriate (for them) and sustainable (for us).
Monies received on behalf of my four-year-old were put in an envelope, along with his previous collections. At an older age, we will be opening a joint savings account, which was what happened for my seven-year-old, Oliver.
Before we ventured to the bank, I had Oliver physically count the cash. We also discussed how much the collection was worth and how much it could become.
This is to help him see money as a tool for making purchases, fostering a sense of discretion. This involves considering not only the immediate benefits but also the opportunity costs and the importance of preserving purchasing power.
Think Long Term
It is crucial for parents to view money as a long-term resource that must evolve and expand as their kids grow, consistently reinforcing this concept throughout their lives.
For example, somewhere down the line, I’ll introduce Oliver to bank statements. This is so he will be able to see how his money is growing, based on the decision to save (deposits) and the reward from the bank (interest) for saving. He will then be able to understand how his deposits from his Lunar New Year money contributed to his financial growth and the balance in his savings account.
As we begin to teach our children financial planning, it is helpful to tack lessons onto life moments and experiences. It provides examples which are easy for them to grasp, such as what to do with money received during the Lunar New Year.
Three Key Reminders
To conclude, here are three areas to consider when beginning this long journey of financial literacy:
- Help your child develop an understanding of the value of monies collected. What can the total sum buy now and in the future? Brainstorm a few things and let the conversation flow. This helps them understand what money is, why we need to be constantly considering it, and how it impacts our everyday.
- The differences between instant gratification versus delayed spending in both personal and family finance. Discuss how this impacts us in life, from our savings account to investments, and even retirement funds eventually. Don’t be afraid to share your experiences — kids love a good story!
- Be mindful of your behaviour. You are your child’s hero and role model. Our children are keen observers, absorbing much of the world around them, including our actions. They see how we discuss family finance with our partners or stress over bills. Be cautious of the assumptions they might internalise and how we can set positive examples. By doing so, we provide them with a healthy perception of life’s intricacies.
(See also: RETIREMENT 101 FOR PARENTS IN SINGAPORE)
Ruperto Ancajas is a Portfolio Specialist at Foord Asset Management Singapore. He has held roles in investment communication and business development in the financial industry for the last 18 years. As a husband and father of two, Ruperto cares deeply about family finance and is also a financial literacy advocate for children and the underprivileged.
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