Our economy is still not doing as well as expected. Growth forecasts have been revised downwards and interest rates are less than 1% for fixed deposits in most banks. Even the savings accounts have a really dismissal interest rate of 0.05% here in Singapore. You may be better off keeping your money under your mattress like during olden times instead of letting it be subjected to the various account-keeping fees incurred by leaving it in the bank.
In this time and age it is important to educate your child about the need for budgeting and prudent spending. Inflation rates are rising faster than salaries and one’s spending power is rapidly diminishing.
It is time to cut off the “Mummy credit card” and teach them about budgeting and living within their means.
Here are some tips on how I teach my kids how to save money.
- Have a budget.
It is important to know how much money comes in how it gets spent. Each child gets an note book where on one page they put down their income and the other adjoining page note down what they spend on. It is necessary for them to see where their money goes and in which areas they will be able to cut back in.
- Do not buy items on a whim
Impulse purchases are seldom on items which one really needs to use. Most of the time the item may end up as a white elephant and it is a “wasted” purchase. Each time my kids asks to buy an item I will make them give me a reason to why they really need the item and what use for the item would they have for it. An “I like it” response doesn’t cut it as a vaild reason for a purchase in my book.
- Look out for bargains and bulk purchases.
You maybe able to save a bit from coupons or discounts on the items which you use. Sometimes it make more sense to buy in bulk if you use a lot of the item or stock up on it. Sometimes buying things off season does help to save up dollars here and there.
- Have a shopping list
Having a list will ensure that you only get things that you need and don’t end up with extras of one item which you may not need so many of. A list will also remind you about the items you need to get so there will not need extra trips out to get the items you missed the first time around.
- Saving up for what they need.
It is important to teach your child to save up if he or she wishes to commit to a big ticket item. By learning to put money aside and cutting back on certain unimportant purchases they are learning how to prioritize what is important and not so important to them. They will also cherish the item of their desire more since they saved up to purchase it.
Do you have any other budgeting tips to share with me?
Dominique Goh, Singaporean elementary school teacher, freelance writer and mom of three who is passionate about parenting and educating kids. In her free time you can see her dabbling in photography, cooking and cake decorating and blogging at Dominique’s Desk.