Top 5 Money Concepts Your Child Should Know

No generation has more money at their disposal, with more pressure to spend it than those born into the 21st century. The challenge for you as a parent is to educate your children about money; its value and the values of restraint and responsibility that must come with it.

If parents do not step in, your child’s peers and the media will. And they will learn the worst things about money: That clothes and gadgets are who they are, video games and allowances are their birthright, and credit cards will satisfy all their whims and fancies.

In short, if your children grow up not knowing the value of money, they will lose control and spiral into money troubles as an adult.

So what should your child know about money?

The early years are crucial. You’ll be amazed how quick kids as young as four can pick up rudimentary money recognition skills. They will if you let them, because before the age of 8, they should grasp:

  • That money buys things
  • That money is limited
  • Some basic money recognition skills
  • That two 10 cent coins is the same the one 20 cent coin
  • The concept of receiving correct change for small amounts

As children approach 12 years of age, they already possess a wealth of knowledge about money, but parents are still their most important source of financial information. But their knowledge of money and finance are full of gaps that need filling. And before your children reach 12 years of age, they must:

  • Understand where money comes from
  • Be given a limited allowance and know how to manage it
  • Know how to save for something they want
  • Know how to compare prices
  • Have their own savings account

The teenage years are a time of revelation for you as a parent. Your teenagers will need bigger allowances to feed bigger expenses – rightly or wrongly. These few years provide the best opportunity for parents to plant seeds of financial acumen or risk leaving it to nature. Hence, by the time they’re above 16, they should know:

  • That money grows when they save or invest it
  • How to manage their allowance and expenses on a balance sheet
  • How to be responsible for their own ATM and debit card (no credit cards!)
  • How to stay or get out of debt
  • The very fundamentals of how to make money grow

For more advice on raising a money smart child, head to "Parents’ Resources" section at

Give your children a head start with customised, learning-through-play programmes at The Money Clinic.

Cultivating saving before spending

Teaching the child the importance of saving before spending can also help them build their pot of savings early. When they are still in pri sch, we as parents can help the child decide how much to save and give them some incentive like topping up their savings by a certain percentage if they hit a certain amount of savings, we can also guide them and decide a percetange of pocket money to save every week. Once they hit sec sch, more money freedom can then be given to them and at the same time keep a good watch on their spendings and make sure to step in and give them advise when things are not on track. Giving them weekly allowance and then moving on to monthly allowance will also give them a sense of responsibility and learn to allocate their money and spread their expenditure over a certain period.

I teach my gal abt money management from young

I, too teach my gal about money management from young (when she was abt 5-6 yrs old). I told her how money is earned and how shd it be spent wisely, and also abt the risk and reward of equities/ futures/  investment and beware of money scram.

so much so that, i think now she is more frugal than me….kekeke. Just to give some examples, when she was in primary school, she would not throw away her easer, (which i considered it to be too small to be used) or pencil (too short to be used). when I wanna to buy her a new item to  replace the old one, she would say that it is a waste of money. Since young, she had never asked for any toys when we were shopping. Instead it was me who wanted to pamper her with toys and I had "to seek permission from her"…..Pretty funny, right???. whenever she sees a one-sided printed paper, she would collect it and used it for rough paper for he schoolwork. But it is the way she uses it as rough paper that shocked me. She would make use of every bit of empty space available…….she said save the EARTH……

good tips. thanks for

good tips. thanks for sharing

Thanks for the write-up. I

Thanks for the write-up.

I think a good start is to teach them how to manage their allowance.  I emphasized a lot on savings and i will ask my P1 ds1 to save first before taking out the balance to school for his recess.  He is a funny boy.  One nite, he asked me if he can have an ice-cream during recess.  I asked him how is he going to manage with his $1 allowance (after saving cents, a standard portion of food in school cost between70 cents to $1), he told me that he will bring a sandwich from home and buy the ice cream with his allowance.  Hmm, I’m not sure that this is the way i want him to do when he is older, but i guess that’s a start.  🙂


this is pretty tricky. my

this is pretty tricky.

my ds1 has reach a stage whereby he is willing to settle for a cheaper alternative (eg types of toy) but he remains not totally happy with the purchase even though he fully understands that the difference is the amount that can be saved. additionally, it can take him a very (very!) long time to decide what he wants to buy when he is given that $1to spend freely at the store.

at times, i have to remind myself to just let the child be a child and resist the urge to overemphasize on money concept.


awareness of money starts from the parents!

I think at a younger age the parents should talk to children about how literally hard-earned their money is (since i believed most work aren’t easy) so the children can appreciate and will think more wisely about spending money.

And at an older age, parents could let children in about household expenditure. Usually kids are shielded from having to worry about expenes and grow up not having a complete idea (like all the different kinds of taxes). Having a more complete idea will encourage them to save up when they started working (especial for wedding & house renovation).

I think I must

I think I must have OVER DO it for my DS money education – so much so that he says he wants to exchange his Japan trip prize (if he wins) for cash so that he can save all his money to buy a …….. MRT train. Ehm .. now you can possibly guess his age group. 

Money management is certainly important

Money managment is important for everyone, and there’s no better time to start teaching your kids than when they are young. No matter how much one earns, if he/she does not have financial literacy, he/she will easily end up with money problems.

As parents we need to be a good role model to kids, and you will be surprised how much they can learn/pick up. DS1, who is 4+, already knows that in order to withdraw money from the atm, we have to put money in the bank first. He also knows that we should not believe what advertisements promote, and to avoid unnecessary expenditure.

Of course, it also depends on the kids’ characters. DD2 who looks like she’s going to grow up to be shopping queen, has been to say "Buy lor" without giving it further thought. I have my work cut out for me, where she is concerned. 



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