One good way to engage your kids in such unusual times now, is to educate them about personal finance. If you need to do so with your kids, this is the article for you, with tips grouped according to different ages.
4-6 years old: Introduce them to the concept of money and how money is utilised
Visual illustration – show them the various forms of money such as notes and coins.
Explain to them how they must pay to get the things they need/want.
7-10 years old: Educate them about earning and saving money in primary school
Teach them how earning money works.
Paying them when they complete a housework – they will learn that they have to work for money.
Or prepare a chart with the chores and the corresponding amounts they earn from doing the various chores.
This is the phase where they can understand the value of money and cultivate the skills to plan forward.
How to teach savings – encourage them to set aside some money until they have enough to get what they want, instead of spending it all at once.
11-14 years old: Open their bank account
Since they have acquired sufficient funds and knowledge on savings, it is time to set up an account for them.
Credit scores & how credit scores can affect their credibility and hence the amount of interest they are subjected to.
Warn them on the risks of carrying balance on a credit card – a possible way is to let them be the authorised user of your card so that they have a sense of its function.
Child in tertiary education
Ensure that they have already drafted out their budget and they have the capacity to pay off expenditures, whereby at most 50% of their budget will be set aside for expenses.
Ensure that they have an emergency fund – 3 to 6 months of expenses may not be saved yet, but they should have kept $500 to $1000 minimally for unforeseeable circumstances that require the extra money.
Child graduated and fresh in the workforce
Advise them of the following:
Get a credit card of their own to strengthen their credibility.
Retirement planning is one of the major components of any financial plan. It allows you to build for the future based on your current circumstances.
While we can’t see the future with a crystal ball, what we can do is to plan for it.
Some of the most common retirement expenses one should plan for are:
Housing is a big expense no matter what stage of life you’re in. While the majority of retirees own their own homes, some still have to factor in mortgage or rent payments.
While you’ll no longer use your car for commuting to work, transportation is still a large expense. Insurance, gas, and repairs should be part of your budget. If you live in a city with public transport, see what senior citizen discounts you qualify for.
According to a report by Asia-Pacific Risk Center, an average of US$37,427 will be spent on healthcare for each elderly person by 2030. It’s important to note that MediShield Life doesn’t cover some health care expenses like dental work, glasses, hearing aids and long-term care.
As long as you aren’t planning on dining out regularly, your budget for food shouldn’t increase significantly. At the same time, you’ll have more time to cook meals at home.
How would you like to spend your retirement? Think about expenses for travel or even local entertainment like movies, museums, or concerts.