Money lessons for kids



Have you ever talked to your children about money? How about savings or investing perhaps? As a parent, our greatest joy and pride are our children. Seeing them grow and develop as productive members of the society is what every parent dreams for their children. It is for this reason that we invest heavily on their education to make sure that they are equipped with the right values and necessary skills to face the challenges of our “grown-up” world. We want to see them excel in their careers and cheer on their successes, but with all the steps that we’ve been taking to develop their character, have we devoted enough time to prepare them in becoming financially smart? When was the last time you discuss personal finance with them? Most of the time, what parents fail to teach their children is the value of money and how their attitude towards it impacts their entire life. The subject of money is one of the well-known taboos when it comes to dinner tables at homes but educating and exposing your children early on with this subject can prove to be extremely important as they mature.

Money lesson begins at home

Teaching your kids the value of savings and investing should be a family activity where every member of the household takes part in the learning. Begin by introducing simple concepts like the importance of savings versus spending, needs versus wants and how their decisions on these things will affect their future.

Help them set financial goals

We might think that setting financial goals with our children is too early to introduce; but helping them understand why they need to save and invest is a crucial part in their financial education. Having your children set up their own goals will help in their acceptance on why they need to save first before heading to their favorite toy store. Help them set up a simple and easy to achieve goal, like buying an inexpensive toy. Make sure their goal is not too high so they don’t get too impatient in realizing it. Keep them excited by regularly monitoring their savings and giving positive feedback on how well they are doing and how close they are in achieving their goal. If their goal proves to be unrealistic with their current capacity to save, you can introduce a matching bonus program where you match every penny they save to help them achieve their goal in a reasonable period of time.

Teach them financial responsibility

For older children, it is recommended that you provide them with weekly allowances instead of daily in order to introduce the concept of budgeting. Encourage them to spend within their allocated allowances while saving some for their goals and refrain from giving additional money once they run out of cash before their next allowance.

Where to save money?

It is equally important to educate your children on suitable investment instruments available in the market where they can place their savings. Having their own savings or investment account under their name can provide empowerment and a sense of pride to your children.

You can begin by helping them open a bank savings account.

For parents with moderate to aggressive risk appetite towards investment, you may want to introduce your children to the world of investment thru pooled funds like mutual funds.

Mutual funds are paper asset instruments that are made up of pool of funds coming from different investors with the purpose of investing the funds to different asset classes or securities like stocks, bonds, money market and government securities. The advantages of mutual fund are higher potential returns, diversification, affordability, flexibility and professional fund management. On the other hand, returns/interest from mutual funds is not guaranteed unlike your regular savings account in a bank. For children younger than 18, parents can open a mutual fund account as an In-Trust-For (ITF) account.

One important thing that you need to teach your children when it comes to investing is the concept of risk and reward. Taking on more risks can provide potential higher rewards in the future.

You may visit to view the mutual fund companies in the Philippines.

Cheers and Good luck!

Jesi Bondoc is a registered financial planner of RFP Philippines. He is the director of My Wealth MD and Partners, Inc. which specializes in investment advisory and oversight. You can send your money questions at or and they’ll be answered in his next article. For more information about Registered Financial Planner program, e-mail to or text <name><e-mail> <RFP> at 0917-9689774.


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