Chinese New Year is around the corner, and we know what that means for our kids – lots of visiting and hongbaos! And also nagging and kaypoh relatives. Unfortunately, we can only help you with teaching your kids the value of money – the relatives are a whole other matter!
The CNY period is a great time to sit down with your kids and explain to them the bare basics of managing their money. It’s knowledge that’ll be extremely valuable to them in the future; when they’re getting larger amounts of allowance from you, and eventually when they start earning their own income.
Create a savings account for them
Empower your kid by giving them the responsibility of saving up their money – you’ll be placing ownership over managing their funds into their own hands.
When starting out, what you could do is to deposit the entirety of their hongbao money into their account and then allow them to withdraw and deposit funds with your permission. When they’re older and if they seem responsible enough, give them the chance to fully manage their account on their own.
Letting them see their savings grow from month to month because of their own effort is something that’s extremely effective and simple to grasp; it’ll make an impact on them to see visible growth of their savings.
Guiding them away from instant gratification
If your kid wishes to use their hongbao money to buy something, set a budget for them and get them involved in the buying process.
For example, with a budget of $50, they’ll be able to get a few standalone Lego buildables but not an entire diorama. Help them compare the prices of the standalones and diorama, and show them that if they want a diorama, they’ll need to save up to get it.
Show them that delaying a purchase is sometimes better in the long run, where they’ll be able to get something more substantial out of waiting and saving.
Keeping track of their money
Aside from opening a savings account for them and teaching them to delay their gratification, you should also teach them a bit about budgeting. From personal experience, keeping track of my expenses is something that was difficult to pick up as a teenager and then an adult (I’m a lot better now though)!
Get them a little notebook where they’ll write down how much they save and spend on items. Use green in one column for ‘deposits’ and red in another column for ‘expenditure/withdrawals’. For things that they spend on, ask them to write down what they are and how much they cost.
At the end of the day or week, help them out with calculating the amount that they’ve saved or spent, and then go through their expenditure with them.
By doing something like this, they’ll hopefully come to understand the significance of money and how to keep track of what they spend on – and potentially not spend it all at once!
Recommended read: Having A Healthy Chinese New Year!
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