Retire@21:Kids & Finances - Start Them Young

Most Filipinos do not understand that teaching your son and daughter about business plays a big part in Succeeding in Business later on in Life. That doesn't change for People in Bacolod. For more information read Retire@21 in philmastermind.blogspot.com 

For Ryan Soh, CEO of MoneyTree (an organization that provides financial educational programmes for children), it’s never too early to get children to manage their finances. “The economy is moving at a rapid pace and understanding how money works become a basic requirement in order to effectively improve our lives and plan for our future,” he explains.

In addition, there’s also been the worrying trend of many young adults below 30 in Asia finding themselves heavily in dept. According to a report from The Straits Times in June 2008, people from this age group are the fastest-growing group of debtors and are most likely to miss their credit card payments or not pay their bills in full.

“Kids here tend to believe that their parents will always support them financially. They tend to overspend and are not able to keep within their means. They don’t know how to do budgeting nor understand the importance of it,” says Soh.

Many of the programmes that Ryan runs aims to get Singaporean kids and teenagers to be conscious about their money and develop healthy financially habits. He shares with Nanz Inc.Com readers some pointers on grooming dollar-savvy children:

If your child is 6-8 years old:

Be progressive: Start out by giving your kid a daily allowance, and gradually progress to a weekly, followed by monthly allowance.

Start saving: Encourage them to save 10-20% of their allowance first before spending that amount.

Break up the denominations: If you are giving a $10 weekly allowance, don’t give your child a $10 note. If we want to encourage them to save, give ten $1 gold coins or five $2 notes so that they would be encouraged to put some of the money in their piggy bank.

Appropriate size of piggy bank: This is very important. Don’t give a 7-year-old child a piggy bank that will take 3 years for him or her to fill up. This is discouraging. Size the piggy bank according to the child’s age (the younger the child, the smaller it should be.) This sets realistic milestones and will motivate the child. Offer a reward when the piggy bank is filled.

If your child is 9-12 years old:

Create a budget: Assist them with this and monitor them to ensure they are following their stipulated budget.

Get them to compare prices before buying anything: This hones their skill in getting a good value out of their purchases.

If your child is a teenager:

Understand the concept of inflation: When teenagers understand the impact of inflation on their future lifestyle, and that inflation ultimately eats away at their assets, they will be able to select investment avenues for true growth of their money instead of just depending on traditional methods like savings.