16 May 2025
SOURCE: CPF Board
Financial literacy is one of the most essential life skills you can equip your child with. From money management to good saving habits, here are 3 things to teach your children about money from a young age!
1) Building a consistent saving habit
When your child is born, their CPF accounts are automatically created upon registration of birth. This means that it’s possible for them to benefit from the Ordinary Account (OA), Special Account (SA) and MediSave Account (MA)’s steady interest rates from day 1! You can make top-ups to their accounts to help give them that head start.
When they’re older, you can show them how their CPF savings grow by leveraging the power of compounding interest – the earlier top-ups are made, the more they will grow over time. An important lesson to impart is that even small amounts can grow significantly, if you save consistently. Keeping a visual record of how their CPF savings has grown can be a powerful way to teach your child about the value of starting early and maintaining consistent effort towards one’s financial goal.
2) Having a plan and sticking to it
Teaching your child how to achieve their financial goals can also help them build good money management and financial planning skills in the long-term. If your child has something they want, like a toy or electronics, instead of buying it for them directly, you can encourage them to save up from their allowance to buy it themselves.
To help them better understand and form this new habit, you can guide them through the process, such as setting a goal of how much money they need to purchase the item, and knowing how much money they normally spend from their allowance on other items like snacks. Encourage them to think about how long they would need to achieve that set goal, or if they can achieve it sooner by spending less on other things.
In this way, you’re helping your child define their financial goal clearly, and formulate a plan on how to achieve it.
3) Know what’s in the toolbox
To build a strong foundation of financial literacy as your child grows, the Institute for Financial Literacy has a range of MoneySense for your Child resources you can tap on for age-appropriate activities that can help solidify the learning.
As parents, wanting the best for your children is normal, but there’s only so much that you can do on their behalf. By building good financial habits and values early, you’re setting them up for success down the road!
The information provided in this article is accurate as of the date of publication.
