Financial Literacy for Children

Inculcating children with the habit of saving is a good start. However, gaining a proper appreciation of money involves more than a physical box to save coins. For example, how can we teach concepts such as planning ahead, budgeting, and delayed gratification, that will benefit children for the long term? 

A talk conducted by IFL at Bishan Library in collaboration with NLB

Here are the top three tips from Mr R. Sivanithy, Master Trainer at the MoneySense – Singapore Polytechnic Institute for Financial Literacy on how we can help our children learn about money and develop the right skills to make good financial decisions from a young age:

1. Tip #1: Save before Spending 
   Encourage children to set aside a fixed amount of their allowance every day or month before spending.
   
   
2. Tip #2: Differentiate between Needs and Wants 
   Explain to children that a need is a necessity such as food and water. On the other hand, a want is something that is nice to have but not necessary, e.g., a new toy.
   
   
3. Tip #3: Lead by Example 
   Share your thought processes about money with your kids and encourage them to ask questions about how you save and decide what to spend on.

Research has shown that children first learn about the world through observation and imitation. Hence, the adult role models they interact with, including parents and even their preschool educators, are crucial in imparting positive financial habits to children. So do try out these tips with your young ones!