It is important that parents teach their children as early as possible how to manage money well.
AXA Philippines, one of the country’s leading insurance companies, offers some tips on how to teach children important financial lessons:
Introduce the concept of money. Helping children understand and respect money from an early age will help them manage it well when they become adults. Start by letting the child see and handle coins and small bills so they become familiar with money as part of everyday life.
Start with a savings jar. A piggy bank is a good idea, but a clear jar is even better. With a clear jar, the children see their money growing. Saving loose change or 10 percent of their allowances can make a big difference. Talk this through with them and stress the importance of savings.
Let them earn. Summer jobs will help young people learn about business and hard work. The same goes for doing chores. If they get an allowance, call it a commission instead. Allow kids to earn commissions for different household chores.
Show that things cost money. Do more than simply saying, “That toy car costs ₱300.” Let them get some cash from their jars to bring to the store and let them be the ones to hand the money to the cashier. This simple action will have more impact than a five-minute lecture on the value of money.
Set an example. Children learn by example. The best way to teach them about saving money is to set a healthy example for them that they will be much more likely to follow when they get older. Show children how prices differ and explain how to make more intelligent choices. Reiterate the message that every time they get money, they should save part of it to prepare for the future.