How can I help my child?

Money lessons for kids that will last a lifetime

Financial literacy for children can start at an early age. From there, their knowledge will only grow — just like their money!

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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?

Financial literacy in children

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.

When can you start teaching your child about money?

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.


Teaching the Value of Money: Piggy Bank 2.0

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.


More Money Lessons for a Lifetime

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:

  1. Give an allowance. You can start giving your child an allowance when they enter school, or even earlier. It doesn’t have to be a large sum of money. The role of an allowance at an early age is just to get your child used to having money.
  2. Roleplay. During playtime, pretend you are at a restaurant and make sure to roleplay paying the bill as well. You can also do pretend grocery shopping, or sit them on your lap and go online shopping together.

Primary School:

  1. Budgeting 101. As your child enters primary school, you may want to give your child’s allowance in a weekly lump sum — even monthly if you think they can handle it. This will teach your child to budget. And if your child spends it all in one day, be strong and don’t bail them out!
  2. Open a bank account. The Asia Money Parenting survey revealed that 48% of parents have opened savings accounts for their children. This is a simple way of teaching your child how to grow their money in the early years of their life.
  3. Set goals. Nothing will inspire your child to save more than a personal goal of their own. Just be sure the goal is realistic. If your child’s goal is a little expensive, try an incentive scheme, like matching them dollar for dollar — a simple method of teaching them that saving money makes more money.
  4. Monetise the chores. Teach your child the value of hard work by putting a monetary value on the chores that they do at home. This is an effective way for children to learn how to make money through experience, and 33% of Asian parents use this method.


  1. Level up the money talk. As your child enters their teen years, make sure your regular money talks evolve with their level of maturity. Motivate your child to save more money by teaching about the power of compounded interest. You could be the “bank”, allowing your child to leave money with you and you give back the principal with interest after a period of time.
  2. Encourage them to get a part-time job. The exact job doesn’t matter — they can work at a fast food restaurant, wait tables, or service customers in retail. The idea is to teach your teen the dignity of work.
  3. Fake invest. “Knowing how to grow money” is a desired money parenting outcome of their children for some parents, and if you are one of them, you can teach your young adult to invest in stocks by doing a dry run first. Have them invest on paper, putting fictional money in actual stocks. Keep track of the performance of their portfolio and reward them when they do well. And when they’re ready, invest for real, starting with small amounts.

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.

Get to know more about #MoneyParenting and speak to our Unit Trust Consultant.