How to money parent your child: an age-group guide

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If you’re like most Asian parents, you probably view teaching your child about money as a crucial task so you can prepare them for life. In fact, over 95% of parents across Asia rated money parenting as something that is important to their family, found the Asia Money Parenting survey commissioned by Eastspring Investments.

While it’s a clear priority for Asian parents, the methods to teach your kids about money are less obvious. How can you do this? And what money lessons are right for their age?

The key to teaching your kids about money lies in observing what they’re ready for. No two children are the same. Some will fill up the piggy bank with ease; others might have trouble understanding that money isn’t a limitless resource.

The important thing is to make practical money lessons — simple, no-nonsense financial education — a regular part of your family life.

Every child is different, and certain things are better learnt and understood at specific ages. Here is a guide for parents on how to teach your kids about money according to their age group:

At this age, it’s all about understanding the world. Toddlers and preschoolers need to learn the basics: what money is and what it’s for.

What can you do?

Familiarise your child with money. Give them coins and bills to play with, pointing out the pictures as well as the denomination on each of them.

You can also teach them that mommy and daddy work to earn money which goes into a bank account. Have your child accompany you to the ATM — maybe they can even press some buttons!

Most importantly, teach your child that we exchange money for things. Take them shopping with you so they see this firsthand. When you’re paying at the grocery, or at a restaurant, have your child help in settling the bill by finding the right note or coin from your wallet, or give them the money and let them give it to the cashier and have them receive the change.

Having entered primary school, your child is rapidly learning more and more about the world every day. This is an ideal time to teach them about the value of things¹.

And how can you do this?

You can start by putting a price tag on everything. Not literally, of course, but at this age, your child is ready to understand that some items cost more than others. Take them on grocery trips and point out prices. Make them choose which cereal to buy based on your budget: one pricier box with the marshmallows, or two boxes of corn flakes?

A separate but connected lesson is the difference between value and price. For example, teach them that during recess, for the same amount of money, they could either buy junk food or a nutritious sandwich. The price of both items might be equal, but the sandwich would give them more value for their money, nutrition-wise.

To get started on money parenting for this age group, there are plenty of resources online. Cha-Ching, a financial literacy programme created by Prudence Foundation, in partnership with Cartoon Network, is a great starting point. There’s a wealth of online videos that provide financial education for your child around the four key concepts of Earn, Save Spend and Donate. Check out parent guides and downloadable tools for you to explore on your money parenting journey.

While the marshmallow test can provide fascinating insight on a young child’s ability to delay gratification², at this age, it’s time to put the lessons of the marshmallow test into practice. 10-12 year olds definitely have the capacity for some self-control, making this an ideal time to teach saving and spending³.

How can you introduce this?

Your child’s allowance is key to learning about saving and spending⁴. Get into detail with them about how they are spending their money, how much they are saving (if any), and why this is important. Regularly check up on their progress so they become more aware of how they are doing financially.

You can also encourage them to be independent, such as letting them do grocery runs on their own, armed with just your shopping list and some money. That way they’ll have to make purchasing decisions based on the budget you’ve given them.
Still looking for more resources? Look at this Cha-Ching activity you can do with your child to understand what delayed gratification is and how to make purchase decisions.

Teenagers should be on the road towards financial self-sufficiency — and don’t think it’s too late to money parent them. To achieve this, you need to give them the right tools. This can include learning how to budget, recognising advertising traps, and discovering the power of compounded interest.

How do you teach a teenager about money?

Start by reminding them of the many ways advertising targets them — especially online where every click, every like and every search is monitored by tech platforms to deliver targeted ads and more. Do they notice how related ads would start popping up all over their social media feeds, every time they search for something on Google?

Educate them on how marketing can influence their spending behaviour. For example, one study found that the more children watched TV and its advertisements, the more likely they were to ask for more items at the grocery store⁵.

Teaching your children about money and raising them to be financially-literate adults takes a lot of work, but it is one of the best gifts you can offer them as a parent. For more tips on how you can discuss money matters with your child, read about money lessons that will last a lifetime.

At the end of the day, this is only a guide. Remember, every child is different, so teach them at a pace that they’re comfortable with. As a parent, you know that it is the journey that is important. As long as you’ve taught your child the basics of money management, on which they can build on with their own experiences, then you’ll know that you’ve done your job well.