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Your Child & Money (II)
( Child as Saver )
Dec 1998 Alan S.L. Wong

Your Child & Money (II)

We will look at this topic from different angles - parent as investor, child as saver, child as consumer and child as giver.

Child as Saver

Most young children would not appreciate the concept of saving money for "later" use. To encourage savings ... try this idea of saving for something the child would want to buy for himself.

Encourage the child to set aside a small amount every day for one or two weeks (depending on the value of the toy and how much the child is willing to save each day). At the end of the period, go with the child to buy the toy.

In many Singaporean families, all the "red packets" (money in small red envelopes) received by children during Chinese New Year go into bank savings accounts in the child's own name. A passbook is exciting because it is stamped every time there is a deposit and a new balance is shown. Highlight to them that the interest causes their savings to grow without any effort and the interest is higher when their account balance is higher.

Our children have pestered us for a portion of the money from the red packets to be set aside for toys but we have resisted thus far. We explained that they had received a number of presents and toys during Christmas and that the money from the red packets is reserved for their education.