Recently, I’ve been thinking about how and when to introduce the concept of money and savings to little Edison. I’m pretty sure that he does not understand the concept of money yet.
So, I did a bit reading on the internet. Most experts agree that children should have their own money to spend at the age of three or four. At this age, money becomes something visual to them. A piggy bank is certainly the best way to teach them the concept of money, spending and saving.
Having said this, I realized that my FIL has given a super cute piggy bank to little Edison a week ago. Yes, this is definitely the best tool to start! I emptied my pocket for all the coins that I had. I showed little Edison the coins and their values, and how to deposit the coins into the piggy bank. The next moment, he started picking up the coins and put them into his piggy bank.
Little Edison is indeed a fast learner. We only need to show him once or twice, and he will be able to pick up the skills effortlessly. Every time when he deposits money into his piggy bank, I will praise him as a form of encouragement to him.
He will clap his hand the moment he inserted the last coin into his piggy bank.
I have a few ideas on how to set-up piggy banks for little Edison:
Piggy Bank # 1: The Ordinary Account
Any forms of money given to little Edison (including ang pau & gift) will be deposited into this account. Little Edison can use the money in this account to purchase things with permission from mommy and daddy.
I opened an OCBC Mighty Saver’s account for Edison – to serve as the Ordinary Account.
Piggy Bank # 2: The Special Account
This account is meant for long-term savings. It has been set-up the day little Edison was born. The objective is to save money for his future tertiary education. I’ve started depositing $400 into this account every month since Sept 2007.
Piggy Bank # 3: The Petty Cash Account
I will set-up this account when little Edison started schooling in future. He can save his pocket money in this account. Money in this account can be spent as he wishes. Once the money is gone, it’s gone.
To encourage him to save money in his petty cash account, I will introduce the dollar-to-dollar matching scheme (just like our CDA!).
These are the few ideas I have in mind now. I hope that this will give little Edison a great start to a smart money management program.