Learn the habit of saving

You may already be the proud owner of a savings account in a bank. If not, you may at least have a piggy bank (till) in which you collect the coins you get from your parents and other elders. Even if you have neither, it's still not too late for you to learn and cultivate the savings habit. This is a valuable lesson which will stand you in good stead, later in life.

Why should you learn and practise this lesson about saving for a rainy day, from an early age? The very first lessons you learn will stay in your mind throughout your life, whereas those learnt later may be forgotten and dropped from your life earlier. Also, when you start saving early, you get more time to save and get an early head start.

Whether you are rich, poor or somewhere in between, saving will benefit you. Those who grow up without learning and understanding the value of money and saving lose out later in life, as they are unable to properly manage their finances. This can lead to heavy debts and bankruptcy and disrupt all other areas of life too.

Although parents may spend lavishly on you out of love, it's also their duty to teach you these habits. The temptation to spend rather than save is strong in this day and age, when many products aimed at children hit the market. If the value of money is not inculcated in children, they will waste everything they have and will not work hard to achieve their goals.

There are different ways to save money and you can get your parents to teach them to you. The key is to start small, aiming first at smaller goals and then go onto bigger goals.

For instance, a child could first be taught to save towards buying a special toy. Later, they can go onto save towards school equipment, books, a computer etc.

Parents can encourage children to save by giving them money for doing household chores, and also by asking them to save whatever they can from the money they may be getting as their expenditure.

Children will thus learn how to fulfil their needs within their allowance, how to allocate their spending money, save for something they want to buy and save for long term. With proper lessons in this sphere, children will learn to make well-informed financial decisions as adults.

Unless you learn this lesson now itself, you may not be able to stand on your feet, and will remain dependent on your parents even when you are a grown-up. By then, it may be too late. So, without leaving room for regrets later in life, start saving right away!

Source: The Sunday Times of Singapore

Guide to kids and money

Pre-schoolers

* Separate different coins into piles and get your parents or an elder to explain their value.

* When you shop with your parents, pay for certain items under their supervision.

* Keep a till and put whatever cash gifts you get for your birthday, avurudhu, Christmas etc. into it.

7 - 9-year olds

* Get your parents to open a savings account for you, if possible.

* Compare prices while shopping and understand the differences in prices.

* Learn the difference between needs and wants and learn to prioritise.

10 - 12-year olds

* If you get a daily or monthly allowance from your parents, allocate your spending and saving rates.

* Plan to save towards any items you may need to buy.

13 - 15-year olds

* Learn and understand the uses of cash and the dangers of credit.

* Save towards any items you may want to buy for yourself and for emergencies.

16 - 18-year olds

* Learn about long-term financing arrangements.

* Get information on investing and various types of financial products.