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Budgeting 101

A Really Awesome Saving and Investing Method To Teach Your Child

Cultivate your child’s good habits.

When we analyzed our poll with more than 100 parents (at time of writing), almost every parent encourages their child to save. All parents know the importance of savings and we received many insightful responses:

  • “(Saving) A simple virtue that all kids should learn, because there WILL be rainy days someday.”
  • “To mindfully spend only what they have and what they wish to save for.
  • “A test of her discipline to manage finances.”
  • “He has to use his savings to buy things he wants.”
  • “Learn to save as young as possible.”

Be it 10 cents, 20 cents, a dollar or more a day, every cent your child saves at their young age is a significant sum to them. Our poll showed that majority of primary school children saved about $5 to $10 each month.

How Much A Primary School Kid Saves Each Month
Less Than $5 31%
$5-$10 32%
$10-$15 18%
$15-$20 8%
More Than $20 11%


Read Also: How Much Money Are Parents Giving Their Primary School Kids?

One parent shared with us a very unique way of teaching her child the basics of saving and investing. This method goes beyond your usual “Piggy Bank”. All you need are three separate boxes for your primary school kid. (A transparent box would be better as the children can directly see their efforts when they save.)

Spend Box

Money your child puts into this box can be taken out for their own use. This shows your child that they need to save up for the things they want to buy. It also shows them that you as a parent are not entirely denying them of their requests but rather teaching them that they need to work for it.

Save Box

Money put into this box is not allowed to be used for their own personal spending. This money goes into their bank account at the end of each period.

As little as kids’ savings might be, this teaches them not underestimate the power of investing just 10 cents each day when they get to see the pile grow day by day.

Invest Box

When your kid puts $1 in their save box, you as a parent puts $1 in their invest box. This “interest” percentage is totally up to you. Some parents might want to be more realistic and have lower interest percentage while others might want to top up dollar for dollar or more.

This teaches children the mentality of investing to get more returns (yes, as adults we know that this might not always hold true). However, for a child, this incentivizes them to put more money in their “Save” box rather than their “Spend” box.

It only takes you once every week/month to go through with your child how much you’re topping up in their Invest box since they saved $x that week. By playing a part in your child’s savings directly, it gives them further encouragement and positive feedback that they’re managing their money right.

With these 3 boxes, you’re giving your child ownership of their own savings when they have to decide how much they want to put in “Spend” and how much to put in “Save”. At the end of a period, put the money from their “Save” and “Invest” box into the bank. Your child gets a sense of satisfaction when you pass them their bank book where they can see that the money they saved has been added.

Cultivating healthy saving habits from young is essential. The younger you start them, the better.

See the rest of our poll results here.

Read Also: 5 Important Money Lessons Everyone Should Teach Their Children


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