ASSESSING CHILDREN’S FINANCIAL READINESS
Before applying for a bank account and debit card for my children, I would reflect on whether they have the maturity, financial curiosity and most importantly, the ability to grasp the concept that money is a finite resource.
In terms of maturity, your child should have an understanding of basic math such as differentiating between ones, tens, hundreds and thousands. He or she should be able to count, add and subtract.
They may begin to seek or display more independence, such as choosing what to buy for lunch at the supermarket, or being able to make payment for it at the cashier.
Financial curiosity would also be helpful, in assessing your child’s readiness for his or her own bank account and debit card. He or she may be curious about why things cost the way they do, where money comes from, and how debit or credit cards allow you to pay for things.
This would be a good opportunity for you to explain why you choose to pay slightly more for organic apples, or why you set a budget of S$30 for children’s birthday presents.
Finally, I think it is important for parents to teach their children that money is a finite resource. The truth is that children will only fully understand the value of a dollar when they understand the value of work.
Hence, they have to be taught that trade-offs need to be made between wants and needs. The use of a bank account and debit card is useful in that they may be able to set savings goals and look at analytics breaking down their spending patterns.
