Have you had the talk with your kids yet? No, not the one about the birds and the bees, the money one. It may not sound as dramatic, but it is just as important for their future.
I still remember the first time my parents taught me about saving. They handed me a piggy bank and explained that they could not buy me everything I wanted. If I really wanted something, I would have to save up for it myself. Fast forward to today and it is conversations like that which have shaped how I think about money.
That’s why I believe it is never too early to start. Here are a few simple lessons you can share with your child to help them build confidence and patience with money.
Saving vs spending: Budgeting 101
One of the easiest lessons to start with is the concept of saving vs spending. Help them visualise the concept of a budget with what I call the jar method.
It works like this:
- Set up two jars, and label one with the word save and the other with the word spend.
- With their weekly allowance, help your child to split it the same way each time. For example, if they have S$10 for the week, S$6 goes into the spend jar and S$4 into save for something they really want.
- At the end of the week, sit down together to count the money in the jars, celebrate progress and talk about the next small goal.
This helps kids see money move in a tangible way and gives them an early sense of control. Over time, it sets them up for more complex budgeting concepts like the 50-30-20 rule. You can also use the spend jar to introduce delayed gratification, where they save for a bigger item later. This naturally links to our next lesson on…
Money that grows: a child-friendly take on interest
You might have seen the classic marshmallow experiment, where kids are told they will get two marshmallows if they can wait instead of eating one right away. We can use a similar idea to build on the jar method and introduce the concept of interest.
Here’s how to do it:
- Pick a “bonus day” each month when you reward your child by adding a small top-up to the save jar – say 10% of whatever is inside.
- Track the growth on a simple chart and let your child colour in the bar after each bonus day.
- Set a “no dip” rule for the save jar until they’ve reached the target amount to buy what they want, like the latest game or even a bicycle.
When they hit the goal, let them make the purchase and explain how their patience made it possible.
Understanding interest is important because it affects everything from how savings grow in the bank, how much you repay on loans and even how quickly small debts can pile up on a credit card. With this simple example, your child gets to see how money grows over time in a way that feels fun and exciting without the need for complex spreadsheets.
Caring for the future you: Plan for tomorrow today
It’s common to ask kids what they want to be when they grow up, but we often stop short of asking how they plan to get there. Just like with savings, it’s helpful to show them that small habits today can make a big difference for their future self.
Here are some ways to get started:
- Use a school example for the short term, like how packing their bag the night before means no missing books or water bottle the next day.
- For a longer-term example, talk about how brushing their teeth every night keeps them clean and strong so they can enjoy their favourite food for years to come.
- Have a quick “future chat” once a month. Ask what they’re saving for, what’s changed and what’s still the same.
These conversations teach kids that planning is a way of caring, for themselves and for the people they love. And as parents, it’s a good reminder to follow our own advice so we don’t burden our children. With one in two healthy Singaporeans aged 65 and above at risk of developing a severe disability1, it’s especially important for young families to review their long-term care plans and ensure their needs are covered.
Saving for a rainy day: Prep for the unexpected
Physical safety is one of the first lessons we teach children. Wear a helmet when riding a bike. In the same way, we can also guide them to think about financial safety and how to prepare for little surprises without panicking.
One way is to start an “Oops fund”.
- Use a small coin pouch that covers small mishaps, like replacing a lost ez-link card or a missing pen.
- When an oops happens, let them use the fund, but remind them to top it up from their allowance the next day.
- You can also play out “what if” scenarios like what if a toy breaks, what if we spill a drink and talk through simple steps to fix the problem.
This helps kids see that setbacks don’t have to feel overwhelming. With a little preparation and calm thinking, problems can be solved. And when they grow up, they’ll already understand the value of keeping an emergency fund around just in case the unexpected happens.
Conclusion: Little steps, big lessons
Money lessons for kids don’t have to be complicated. A few jars, some small rules and regular chats can set the stage for patience and responsibility. The same applies to parents who would have more complex financial situations. If you’re looking for a simple way to organise your own protection and savings while you teach the kids, the Singlife Starter Pack can help you get the basics of protection and savings in place, before moving on to bigger goals like education, healthcare or retirement.
At the end of the day, it’s not just about the dollars and cents. Kids may outgrow piggy banks but they’ll never outgrow the values you taught them.
