SG Budget Babe
Personal Finance 101
Asked on 02 Dec 2019
I feel the curriculum in schools or university has absolutely no subjects that will teach students about personal finances. When would be a good age for me to teach my children about personal finance? Should I train them from young, or should I wait till they're older and understand a bit more?
Schools don't teach people how to manage money unfortunately. I recall saying this to my brother (who's about to graduate), and he whole heartedly agreed.
You can take a staggered approach.
Start by teaching them the concept of needs and wants, budgeting, and saving. Followed by the fact that money is finite and a hard earned resource. Then, the importance of delayed gratification (so that they will save more). Followed by the importance of growing money to shorten the period they need to wait to reach a certain goal.
I find that kids can understand budget/saving from as young as Kindergarden. You'll probably want to introduce need/wants, delayed gratification in lower primary, and then investing in upper primary, as they develop their maths skills.
I ABSOLUTELY AGREE WITH YOU THAT PERSONAL FINANCE EDUCATION IS CURENTLY LACKING.
Personally, I find children who have had to think independently about finances are more savvy and street smart later on, compared to those who always had pocket money from parents and never had to think about budget.
Examples of starting them young:
Get them to work for pocket money - mini jobs at home eg. housework.
If they want gifts/toys - have them know the cost of the item, and how long they will need to save or earn the money
Esp for kids who are used to going to nice places for food, bring them to hawker centres every now and then.
My mom and step dad started teaching me at about the age of 10. Coincidentally, this was also my first foray into 'business' as I started selling chocolates in school.
I was taught about keeping money into separate pots, one for long term, one for spending, I learnt about debit and credit and started even learning about different ledgers in accounting.
I remember loving it cause it was fun.
So I'd say introduce it at about this age where they understand decision making. :)
When you start giving them pocket money, you can start teaching them on financial literacy. Even from primary 1, they can learn on the concept on delayed gratification. "If I don't buy extra snacks, I can save $0.50, which I can save up and buy a toy later." You can also match the amount they save up and put into a piggy bank (as "interest"), where they can feel the piggy bank getting heavier, and allow them to 'break' the bank during their birthday or Christmas where they can either choose to reward themselves or "re-invest" for another season. :)
Financial literacy is the most important aspect of life and it is true that school curriculum do not have good course work on this topic. Hence, it is a good idea to start teaching children about personal finances at the earliest. This can start at a small scale from pocket money so that they are used to concept of savings from a very young age. It is a concept that can be understood over time and not taught instantly. Thus, the earlier you start, the faster they will get comfortable with finances.
I work at Kristal.AI, and it's my passion to evaluate various upcoming investment opportunities.
Instruct them to save money starting from kindergarden by putting angpows into piggy banks
Require them to budget money starting from primary school, fixed amount of pocket money per day or per month
Tell them to earn money starting from secondary school for their personal effects/indulgences via part-time job
Show them how to invest money starting from post-secondary using your own portfolio as an example & help them open their brokerage account
I agree with you on what is happening in school! Unfortunately, financial literacy is one of the most important topics to know in our life!
My personal preference will be to start as young as possible. This can begin anywhere, e.g. while shopping for groceries, buying toys, eating out, or to even having fun together.
The earlier we start educating them on the value of money, the faster they can learn and adapt to undertanding how money works.
When they enter primary school, they will be capable enough to evaluate on the value of the decision that they make everyday.
As they grow older, share with them further on financial planning, understanding different forms of investment, or the best way to save money to buy whatever they like and want.
Here is everything about me and what I do best.
Yeps agree with you. I think in general starting as early as 3 or 4 might help. I recently saw some documentary where kids at the age of 3 are tasked to purchase stuff from the supermarket, using real cash.
So in essence, they start to have decision making capability and I believe that's the right time to start.