Times have been tough in this season as a result of the global pandemic. Economies are shrinking, layoffs are happening en masse, and some businesses have been forced to shutter.
While money woes are no fun, they create the best learning opportunities for children – it is never too early to start possessing financial literacy. As you tighten up your purse strings, don’t forget to convey some of these money lessons to your young ones.
1. It is possible to live simply
With disposable cash on hand, we have to make daily decisions on our purchases. Should we splurge on a restaurant meal for the second time this week or do a sumptuous hawker feast at a fraction of the price? Do we really need to buy this toy or can we instead enjoy our time for free at the playground? What we don’t purchase winds up as additional savings in our bank account.
2. Save for a rainy day
When unforeseen events such as retrenchments or salary cuts happen, having an emergency fund in the bank can help finance daily needs such as food, transport and education. Challenge your kid to put a percentage of his or her pocket money aside and watch that “emergency fund” grow over time.
3. Learn to budget
This works great for older children who receive their allowance on a weekly or monthly basis. First, have them work out the amount of money they need for necessities such as bus rides, school needs and meals. Next, decide the amount they need for saving. Finally, they can decide how to use (or not use) the leftover sum.
4. New is not necessarily better
If a pre-loved rollerblade or piano works perfectly, there is no need to pay retail value for brand new ones. Even better, suggest to your children to share the cost so they can feel the relief of parting with less money than is needed.
5. Give where you can
Many who have been financially unscathed by the pandemic have contributed generously to disadvantaged communities. If you are donating to a cause, let your children know about it so they can also understand the importance of giving to those in need.