Money lessons for kids that will last a lifetime

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We used to jokingly call my father “the money tree”. Forget saving or earning money; if we wanted a new toy, all we had to do was give the old money tree a shake. The truth is, of course, money doesn’t grow on trees.

Equally true: children need to learn the essentials of saving, the value of hard work, and the difference you can make by giving back. What’s more, in a world full of uncertainty, it has become increasingly important that we teach our children the power and the true value of money.

But where do you start? Can children grasp the concept of money? And how do you instill good habits in your little ones that will last a lifetime?

Before anything else, some good news: You’re likely already off to a great start. In the Asia Money Parenting study commissioned by Eastspring Investments, which surveyed 10,000 parents of 9 Asian countries, it was found that 95% of parents believe that financial education — knowing how to use and manage money — is highly important.

Different parents may have different styles of imparting financial knowledge, or money parenting as we call it, but this is especially crucial as parents are a child’s first role model.

Generally in Asia, parents (65% of those surveyed) teach their children about money matters at the age of 10 and under, coinciding with when the children start going to school and managing money becomes a necessity.

But actually, the simple answer for when exactly children should be taught is “as soon as possible”. Children as young as three to five years old can be taught money basics. And you might be surprised by how much they actually comprehend.

In fact, according to researchers from the University of Cambridge commissioned by the UK’s Money Advice Service, money habits are formed as early as the age of seven.

Before you discuss the finer points of an investment portfolio with your young child, a good place to start is the humble piggy bank or savings jar — 47% of Asian parents already do this, according to the Asia Money Parenting survey.

While your child is young, the lesson you want to impart is that money is good and useful, and that it’s often a good idea to think carefully before buying.

To teach this lesson, you may want to give the classic piggy bank an upgrade. Instead, get three jars and have your child write “Save”, “Spend”, and “Share” on each.

The “Save” jar will teach your child that the act of saving is fun and worthwhile versus spending it all on toys or ice cream — a lesson even adults struggle with.

The “Spend” jar is all about teaching your child the power of money. When they realise how money gives them the power to answer their wants and needs, they’ll learn just how useful money can be.

Finally, the “Share” jar lets them learn important lessons like their place in the community, or that oftentimes, it is the giver who receives more.

The Save, Spend, Share Jars are just the beginning. There are many other ways to teach your child about money. If you can make learning about money a regular part of your child’s life, it will reward the both of you in the future — exactly like a smart investment.

Toddlers and Preschoolers:

Primary School:

Beyond:

Money lessons can begin at an early age and should evolve with your child’s level of maturity. Through your constant tutelage, your child can learn how to better manage money, and be more prepared for adult life.