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Thursday, July 4, 2013

National Savings Consciousness Week 2013 - Teaching your Kids to Save

This week, Bangko Sentral ng Pilipinas not only celebrates its 20th anniversary but more importantly, BSP has partnered with the Department of Education for National Savings Consciousness Week.
Financial education is one of BSP's important advocacy and BSP believes that the value of saving is best taught during the formative years.  BSP resolves to help create a new generation of financially literate savers - starting with school children.

This was such a coincidence because last Saturday, the SoMoms had a session with Rose Fausto about Financial Quotient.  I really wanted to attend that session but had to miss it because of school orientation.  So I was happy to find out about this week's celebration and to receive our weekly newsletter which focused on financial basics that we can impart to our children at an early age, to improve our chances of securing their financial future.

I previously posted about financial lessons that can be taught to kids arranged according to specific age groups.  I feel that financial literacy is something that must be part of family lessons - children must not be afraid of money and learn how to save and use it wisely.  Yes, this is cliche but sad to say, this is still not being considered by many Filipino families.

The most basic lesson to learn is the value of money - how do we get money?  It was so serendipitous that I purchased this book over the weekend:
This book tells about how the cubs used to so wasteful with money but eventually learned to earn and value it.  The story discussed several ways how the cubs obtained money - through luck (gifts, etc.) and work.  However, the dad became concerned about how the cubs became too focused in earning money.  It was a happy ending as the cubs gave the money to their parents (which the parents placed in a bank savings account for them).  Good lesson the cubs learned: although you can get money through luck, most people get money by working hard and thus it should not be wasted.

Another important lesson to be taught is the importance of budgeting and saving.  My parents opened kiddie savings account for us early.  I remember getting excited about depositing my angpao in my kiddie account and seeing it grow.  When I started working and was still single, I lived with my parents.  My mom asked me to set aside 10% of my salary into a fund which she still keeps to this day.
With my kids, we have also started savings accounts for them.  Every month, I deposit a fixed amount on their "birth" days.  With online banking, everything is easy - I schedule it every month and money automatically gets set aside for savings.

I have also taught N to put aside her angpao in her bank.  Now, every time someone gives her the red envelope, she automatically hands it to me to put in her bank.  Since Stan and I are able to take care of my kids' needs, I am hoping to instill in them the practice of saving their gift money instead of rushing to the toy store to buy the currently popular toy.

Since the concept of banks and savings is still abstract to N, we also use piggy banks to talk about savings.  She fills up her piggy banks with coins that she earns from her dad.  She has already filled up 3 bears while the frog bank is E's.  This is actually her "allowance".   The money in the big pink bear has been taped to be brought to the bank the next time we visit.

We have also signed up for World Vision to show her the value of money.  Stan and I pay for the donation but the donations are under their names.  So right now, N is sending a little girl to school while E is also sending an older boy to school.  We wanted N to see how she is lucky that her parents can afford to send her to school and how she can help others because she can.

Our visits to the malls - especially to the toy stores - is also planned.  Before going, we agree if the trip is a "buying" trip or a "looking" trip.  Of course, there are times when she wants to get something during a "looking" trip so we discuss.  Because N also loves to travel, we talk about how not buying xx toy will mean more money for our travel fund.

Some people don't like to talk about money, but I find it necessary especially since I want my kids to be financially savvy when it is time for them to be independent.  I believe that teaching kids how to save is an important parental responsibility and is a lesson that should not be passed on to your child's school.  Looking for teaching guides on financial education?  Click HERE for some resources.

Have you started teaching your kids the value of money and how to save? How do you do it?

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