Saving Money Tips for kids

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 When did your child learn about the value of money?

It was a few years ago when Big C was 3, that his eureka moment on understanding the value of money occurred. During a trip at the mall, we walked into a Lego store. Big C had spotted a large Lego set and had set it heart on it. Unfortunately that set cost $300 plus!

Don't get me wrong, I love my son, but spending that amount on a toy for a 3 year old is a tad too much.

I had to explain to him the set was costly and it will take a long time to save for it. In order to buy it, Daddy and Mommy had to work longer hours in order to earn enough money to buy it. So if he wants the toy he will have to wait till we earn and save for it. Somehow he understood this and decided to opt for a smaller box so we will not be away from him due to the need to 'work and save' for the bigger set. From this episode he learned

• Money does not fall from the sky
• Work to achieve what you want
• Save to get what you desired

Fast forward to today; Big C had begun to have his own daily allowance for school. He had diligently saved his daily 'extra' funds. It may not make him a millionaire soon but it does give him a little bit of financial freedom. His savings goal is to have sufficient savings so he can buy Daddy, Mommy and Little Lou a gift during special occasions such as birthdays or Christmas. Personally, I think it is a great goal and I look forward to my first birthday present from him.

Savings has its benefits, but how do you encourage savings for kids?

1) Understand the value of money

In order to encourage savings, the little ones need to understand the value of money. If they can grasp the concept, they will understand that parents are not human ATMs that can spurn out money at will to get what they desire.

A simple way would be comparing the value of a toy to a packet of chicken rice. If the rice cost $2 and the toy cost $100, you will take away 50 packets of rice for a toy. You could also substitute the chicken rice with their favourite food and they will understand how one item is expensive compared to another.

2) Provide a way to save - Start with piggy banks

The Piggy bank need not be in the shape of a pig. A simple tin can will do. Let the kids know that they can save the money they have from unused allowance. Somehow a heavy tin that makes 'cha ching' sound when it is filled is a good motivator for savings.Truth be told, I am 40 and I still have a piggy bank!

Piggy Banks

3) Have the kids decide a goal for savings

If the kids know what they are saving for, they will tend to be more enthusiastic about it. It could be the book they want or a new toy. The key is to let them decide so that they will be empowered with the decision to save.

4) Encourage a child to track his/her savings

Get the kids to count their savings every month and list down the balance. This will encourage them to save if they know they are growing their money.

5) Introduce bank account to the child

To have a bank account means the child would be able to accumulate savings into one location. Most bank accounts pay interest so the funds in the account can grow. In addition, banks do provide monthly statement and this can be used by the child to keep track of the balance. During our visit to POSB to open Big C first ePOSBkids account, he was excited and eager to learn about the process. Get the child involved and they will be more interested in savings.

Sign up here for an ePOSBkids account if your child doesn’t have one.

6) Finding ways to 'earn' money

There are many ways you can encourage your child to 'earn' money. Rewards could be given for completing additional chores in the house. Similarly they can consider selling their old toys in a garage sale in return for extra funds. These will introduce the concept of work and trade in a fun way.

7) Introduce innovative ways to saveThere are many ways to introduce the concept savings that will make savings more fun for the kids

• Make your own Piggy bank
• Create your own saving scheme : matching a child savings if it hits a certain target every year
• Give the child a treat once his saving goal is achieved

Personalised Piggy Bank

The above tips are but some of the way parents can encourage savings. It will be great if both parents and school can share the same vision in cultivating this savings in kids.

To kick off the savings habit, there is an initiative by POSB to give primary school students a head start. The National School Savings campaign is an initiative by POSB, supported by MOE. Together with Smiley the Squirrel, parents can pledge their support for this campaign at www.posb.com.sg/savewithsmiley and encourage non-participating schools to endorse the campaign.

How it works

Each primary school student can get their POSB National School Savings stamp card from any POSB/DBS branch, SingPost outlet and at Pacific or Popular bookstores in schools from 2nd February 2015onwards. The student will deposit the stamp card into any POSB/DBS QuickCheque Deposit location upon completion (20 x $0.50 stamps). The bank will then credit the full value of the stamp card ($10) and a $1 bonus. The $1 bonus is limited to one stamp card per child, per month and only valid for POSBkids account holders.

With the added bonus, children can also learn that the more they save, the more their money will grow. A win-win situation in my books!

Together with Smiley the Squirrel, parents can pledge their support for this program at www.posb.com.sg/savewithsmiley and encourage non-participating schools to endorse the campaign. Hopefully with parental support , more schools will jump on the bandwagon and adopt this well-meaning initiative for the children.

Make a difference to your child, start encouraging savings for kids today.