6 tips on educating your teenage child on financial responsibility
Updated: Apr 25
Did you know that 24 April 2020 is "Teach your children to save" Day in America? Teaching children how to manage money can be an essential life skill to have. By learning about money since young, people can be able to handle their finances better.
Here are 6 tips to kick start your teens' financial education:
1. Teach the value of savings interest by doing savings matching
Teach your child the value of interest by matching $x for every dollar they save! This can incentivise your child to save more and mimics an actual savings account if they don't own one yet!
2. Show your teen how to create a monthly budget
You can work with your child to create a plan on how they would spend their pocket money for the next month. Teach them the difference between needs and wants, and saving a portion of their allowance for future purchases.
3. Introduce investing
Investing in small amounts is a great way for teens to learn about investing. You can start a joint investment account and start investing whatever little savings they have from their Angbao money! This can snowball to a huge sum in the future!
4. Plan for University education
With a growing cost of education, teens should learn about the importance of preparing for university education. Discuss options for either government or private loans, and have them do some research on possible opportunities for scholarships. If you've established a university savings plan for them, discuss how they should use it wisely throughout their university years.
5. Encourage them to donate
Financial responsibility shouldn't end with saving and investing. We should encourage our child to donate a portion of their leftover allowance to those who need it more. Especially in these difficult times, encourage your child to contribute a little to any donation bodies out there!
6. Encourage discussion about money topics
If your daughter is receiving her first paycheck, sit down with her and explain about taxes and CPF. If your son wants his own bank account, show him how to keep track of an account online. Encourage discussion about money topics in your everyday life!