As parents, we want to be able to equip our children with all the life skills they would possibly need in order to be happy, healthy and successful. It’s not enough that we’ve taught them how to brush their teeth, tie their shoelace, ride their first bike, or say ‘please’ and ‘thank you’. Even when you’ve already sent them to school, you know that responsible parenting requires more and that there are other practical matters that you need to teach your kids, and this includes financial literacy.
As much as possible, we want to give our children the foundations that they can eventually build on as they grow older, and one of these is handling their finances. When it comes to parenting tips and money matters, it’s best to start them young and teach them the value of a dollar — in a way that they would understand and appreciate.
Therefore, no matter what your parenting style, when it comes to teaching your kids about money, it’s essential that you keep the lessons age-appropriate. While they might not be able to grasp the concepts of mortgages, equities and investments just yet, experts say that children as young as 3 years old can already understand what it means to save or spend.
Why is teaching financial literacy for kids important?
One of the most important parenting tips and lessons we can learn from the various financial predicaments of the past — from the mortgage crisis to student loan and credit card debts — is that we did not have enough knowledge about handling our money. In order to help our children avoid these mistakes and enable them to lead financially healthy lives, the next generation needs to be taught the essentials about money.
How do you teach kids about money and finances?
Taking on the challenge of financial literacy for kids can be overwhelming at first. If you feel that you need more parenting tips because you don’t know how and where to start, you are definitely not alone. In fact, in a major regional study conducted by Eastspring Investments, the USD 220 billion Asian investment management arm of Prudential plc, found that three in four parents are unsure of their success in educating their children about money.
Furthermore, it was uncovered that over half (51%) of all parents felt that they didn’t know if they have been successful teachers and role models for their offspring. With varying parenting styles out there, it is also noteworthy that nearly half (43%) of the parents surveyed would like to improve their own financial knowledge to become a better role model and teacher.
Nonetheless, almost all (95%) parents surveyed agree it is very important to teach their children about how to use and manage money. Many expressed an interest in financial literacy tools to help them teach their children to use and manage money better. These include mobile apps, TV programmes, websites and workshops they can attend with their child.
Commenting on the results of the study, Seck Wai-Kwong, Chief Executive Officer at Eastspring Investments said: “Financial inclusion and literacy are key topics for us and we are passionate about educating the next generation so that our children understand the value of money and are able to make informed financial decisions to secure their future.
“As a leading asset manager in Asia, we recognise the responsibility we have to society and are firmly invested in the future of our clients and the communities in which we operate. We play a pivotal role in helping parents become better role models by empowering them with the knowledge, skills and tools to provide the best possible financial guidance and assistance to their children and for the generations to come,” he added.
Eastspring Investments and Money Parenting
“The economic uncertainty created by the COVID-19 pandemic means that now more than ever issues around financial security are uppermost in the minds of everyone. During these times, children are increasingly aware of the financial pressure on their families. Through this initiative, we believe parents will be better equipped to help the next generation make sensible financial choices, understand the essentials about money and live financially fit lives,” added Mr Seck.
Drawing on the insights from this survey, Eastspring Investments has developed a dedicated microsite to help parents learn more about money parenting. This initiative is a step beyond parenting tips on how to teach financial literacy for kids. To facilitate conversations among parents about this important topic, Eastspring Investments is planning to launch dedicated social media pages for parents to share their experiences, techniques and the tools they use in their money parenting journey.
Parenting Styles and Financial Literacy for Kids
These techniques and tools acknowledge that parents have their own unique way of imparting knowledge to their kids —the survey identified five main money parenting personas that parents can leverage to better understand their own parenting style. These include The Freestylers, The Facilitators, The Nurturers, The Go-getters, and The Balancers. Parents can then build their individual teaching techniques to deliver the best learning outcomes from their children in terms of financial literacy.
Eastspring’s Money Parenting study, together with the investor education portal ‘Greenhouse’, demonstrates the firm’s commitment to empowering parents and investors. These efforts complement other financial education activities undertaken by Prudential plc, including Cha-Ching that was introduced in 2009 to improve financial literacy for kids.
To download Eastspring’s Money Parenting report, head on to www.money-parenting.com.