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Money Saving Tips for the Kids

Your child has amassed a small fortune in red-packet cash. Teach him how to save and use it wisely using these expert tips.


Remember when your kids find themselves with more hongbao money than they know what to do with. There’s nothing wrong with them wanting to spend it – it’s their money, after all – but you’d prefer if they saved most of it, or at least used it wisely.

“Teaching them to save is a great thing, but you should also be mindful not to nurture a hoarding instinct in your children,” says Lee Cheon Loon, an associate certified coach (ICF) with Executive Coach International. “When they are at this young age, you should talk to them about the long-term benefits of saving. It’s also a good time to have a conversation about delayed gratification and how to time their purchases correctly. Children who exhibit self-control from an early age continue to show greater willpower as adults, and tend to be less impulsive and reckless with their spending.”


He shows you how to motivate Junior to be smart with his money:


PRAISE HIM FOR EXERTING CONTROL over his desire to spend all of it right away. The more encouraged he feels in this regard, the more inclined he will be to save his monetary gifts.


EXPLAIN WHY BIG, LONG-TERM REWARDS are often better than quick, short-term gains. Then, tell him that the choice to enjoy a bigger reward is always his to make.


BE A ROLE MODEL If you want your kid to be prudent with his money, you have to be the same way. “Your children observe everything you do, so be a good example for them,” says Cheon Loon. “You, too, need to show them that you have control over your spending habits.”


HAVE A CONVERSATION ABOUT MONEY Explain the value of money and ask Junior why he thinks it’s important. If he wants to spend all his loot, ask him why, and find out what he wants to spend it on. The purpose of such a discussion is to encourage him to talk openly about money and to understand its importance as a resource, so that he can make smarter decisions about it as he gets older.


Alfred Chia, chief executive officer of financial advisory firm Singcapital, suggests opening a separate savings account for your child for his hongbao money and perhaps his pocket money, too, and letting him watch this investment grow. The more interest he collects, the more enthusiastic he will be about saving. “Look for an account that offers you a no-minimum deposit and fall-below fee until your child turns 21,” says Alfred. “This way, managing the account will be stress-free for you. There should also be no coin-deposit fee till Junior turns 16. If he gets his pocket money in coins, he can deposit it into his account as is. The account should also earn daily interest.

“Yes, the interest rate may be pathetic, but it’s the principle of it and your child may learn a thing or two about investment planning. Finally, make sure you can track the statements online. Your child will love watching his funds grow.”



By Sasha Gonzales, Young Parents, February 2015

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