Your children deserve the best. You want your children to have the best possible education. It is important that they learn the value and importance of money early on. This life skill is crucial and can help them become financially smart adults. This is a win-win for everyone!

Teaching young children money concepts is not easy. How can you make them understand a concept such as money and keep their interest? Here are some ways to get them to understand money.

Your child should be able to save money

Saving is the cornerstone of financial success. However, simply telling your child to save money won’t make it work if they don’t see the benefits. Instead, encourage them to set short-term goals such as saving money for a new toy. For example, you could tell them that saving RM10 per week will allow them to purchase the RM50 toy in five weeks.

Children younger than 5 years old may struggle to grasp the idea of money in the bank. They don’t know where it goes. It is important for children to be able to visualize the idea of saving money. This is where a passbook can be very useful. A passbook helps children visualize how much they are saving and what they spend. It also helps them to develop crucial math skills.

You’ll receive a limited edition Pinkfong Passbook when you open an Alliance Buddy account or Junior smart saver-i account . Let’s say you have young children and are a parent. It’s likely that your child has heard the Baby Shark song and Pinkfong, the educational brand for children. A passbook can be a great way to encourage your child’s interest in saving money.

Show them how money compounds

How can you explain compound interest to children? Let’s use a simple analogy to illustrate the concept of compound interest.

You know what’s even better than explaining compound interest to them? It’s showing them how compound interest works with their money. The Alliance Buddy account earns interest every day and is credited each month. Your child and you can both review your account balance together to see how it has grown. Instead, they should keep their money in the bank for as long as possible. This will allow them to save for the things that are truly important in the future.

The Alliance Buddy account offers a 10% bonus profit on total interest earned over the year if there are no withdrawals and you make a minimum monthly deposit of RM100 each month for 12 consecutive years. If you earn a base rate of RM100 on savings, you may be eligible for an additional RM10 in interest. This incentive encourages children to save well and can be rewarded.

You’ll also get a promotional interest rate at 2.35% per annum when you open a new Alliance Buddy Account and place a six-month fixed deposit between 15 October 2021 & 30 June 2022.

Be a good example of parenting

Parents know that your child’s behavior (good and not so good) can be detrimental to their children. Observation is often the best way to learn. If you want your child’s financial habits to be good, start with you. It can be confusing for children to hear that they need to be cautious with money but then see their parents spend their money in a different way.

You need to get your finances in order. Make sure you have an emergency fund, and save at least 20% of the income by opening a high-interest savings account such as the Alliance SavePlus. Talking about family spending with your child is a good idea. This will help them to understand your priorities.

To reach your education goals, you must build the foundation

You can teach your children financial skills, but it is also important to encourage your child to pursue their dreams. However, higher education can be costly. A four-year degree in pharmacy at a university costs around RM12,000 for local students and RM200,000 for private students.

You need to save and invest early in order to cover these costs. The Elite Kids Saver is an education savings plan that will help you save for your child’s future. This plan will allow you to access funds via a college start up benefit. You can also get insurance to protect your child while you save.

Leave a Reply

Your email address will not be published. Required fields are marked *