Family Finance with Ruperto: Navigating My Kid’s Holiday Budget

School holidays are the perfect time for family vacations, and I recently travelled to Nagoya, Japan with my children. My seven-year-old has a growing understanding of money, from his Lunar New Year lessons and school pocket money. So, on this trip we tried to be intentional about how he managed a holiday budget while on vacation.

Below are some of my best tips for leveraging holidays as a chance to teach your kids about spending and financial planning. Three words encapsulate my following recommendations — intention with flexibility.

Without intention, one is constantly grappling for answers and alternatives. Kids always know when you have not thought things through, and trust me, they see you whipping out the phone and Googling for answers. But when my intentions are clear, however, I have found that there are many ways (some planned, some opportunistic) to get semi-well-thought-through answers from my son.

Tip #1 – Grow the Child’s Awareness

A day before the flight, I sat Oliver down with a spinning globe. Firstly, I asked him to locate both Singapore and Japan. Then we discussed the differences in simple greetings, country size, population, weather, food, and currency. I wanted him to be aware of these differences and what it means to travel to another country and experience a culture unlike his own.

As luck would have it, during our period of travel, one Singapore dollar (SGD) roughly equated to 100 Japanese yen. This made currency conversion much easier — he just had to divide prices by 100. At the same time, I showed him the different denominations of the yen and its coin/note combinations.

Tip #2 – Give the Child an Age-appropriate Responsibility

As many Singaporeans who love travelling to Japan will know, there are vending machines at every corner. Throughout our journey in Nagoya, these ubiquitous machines offered canned and bottled drinks priced from 100 to 160 yen.

We decided that Oliver would carry a coin pouch and be in full control of vending machine drink purchases. Whenever we had coins, we would pass some to Oliver’s vending machine war chest. He very much enjoyed counting the coins and slotting them into the machines, getting the drinks and change in return.

holiday budget spent on vending machine — *Image: Fabrizio Chiagano on Unsplash*

To enhance the learning and understanding, we would always ask him how much each drink cost in SGD after conversion. There was some guessing initially, but as his confidence grew, his answers became second nature.

Tip #3 – Give the Child a Holiday Budget

The reality is that kids will see toys and knick-knacks that they like and plead with parents to purchase them. This usually heightens during vacations. That is why I gave Oliver a holiday budget, from which he could withdraw when he wanted to buy something.

I explained that once he used up this holiday budget, there would be no overdraft. Hence, no more toys. Naturally, the budget blew halfway through the trip. And naturally, Oliver bargained for additions to his budget. We hesitantly decided on a goodwill offer, seeing how we were on vacation, after all.

We allowed him to take from his other pot of savings — the money from his Lunar New Year collection. He was not thrilled to tap into his savings, as he understood this would reduce the money he could later spend on other things. In a way, this was an encouraging sign, as it showed me that he was beginning to understand the value of financial security and takes that into consideration when making purchases.

Reflections on Vacation Financial Lessons

Over the 10 days in Nagoya, it was a joy to see Oliver grow in his worldly understanding. He built up the courage and confidence to count and dispense coins of a foreign currency. He also surprised us by throwing in the occasional “Ohayo”, “Arigatou”, and “Sumimasen” as we interacted with locals. And while his budgeting skills remained raw, he was clearly starting to grasp the concept of opportunity cost.

What I do know is that Oliver’s journey of money management will continue and the Nagoya trip was an incredible building block that we will continue building upon in future trips and lessons.

I hope, above all things, that his memories of the trip are mostly happy ones.