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As the'national conversationl' gets underway, education - an issue close to many Singaporeans' hearts - has quickly emerged as a hot topic. And the Primary School Leaving Examination (PSLE), for so long a rite of passage for children here, has come under the spotlight again, as a Member of Parliament renewed calls for it to be scrapped. Mr Hri Kumar, who sits on the Government Parliamentary Committee (GPC) for Education, lauded the Ministry of Education's announcements last week to 'remove banding, de-emphasise exams and promote non-academic aspects of a child's development', as he put it. There seems to be a consensus across the board that academic qualifications should not be the only deciding factor for students to find success. We're not saying academic education is worthless. Academics is important - learning how to read, write, do math is necessary to do well in the world. As are co-curricular activities which encourages exploring the world, community service, and cultural pursuits. However, one area that is totally neglected in our schools is financial education. Everyone goes to school for over 20 years to learn how to do a job, but there's something schools never teach - how to manage the money you earn once you get that job. That's why there's so many people out there making poor financial decisions - and you can't blame them - they've just never learnt how. But in this world, this economy, ignorance can no longer be a valid excuse. Children need to learn the value of money, how to manage it well, and develop good money habits from a younger age. So, how do you do it well? 1. Play Money Games There are plenty of games out there for children to get into. Monopoly, Cashflow for Kids, and all these teach children to understand how money can be used to buy, acquire assets and invest and earn cashflow in a fun environment. This is a good first step and it shouldn't stop here. 2. Give them their own bank account Children need to be involved in their own finances to give them a degree of control with adult supervision. If they realize they are spending and investing their own REAL money, they'll be much more serious about it than if it was a playing a game without consequence. Children should open their own savings accounts and have control over their spending. In Singapore, child accounts are typically jointly opened with a parent. Some banks, however, do allow accounts solely in the child's name, from as young as five years old. 3. Manage Their Allowances Research on the effect of allowances on children yield startling results. There are generally three types of allowances. One is a regular allowance. A second form is an allowance as a form of reward, for doing chores, for instance. A third is not to give a regular allowance, but to give money when the child asks for it. Children who get a regular allowance have the lowest financial literacy. The ones who do best are those who get an allowance for doing chores or meeting expectations. They're followed closely by those who don't get a regular allowance but who ask for money. The reasoning is children who get a regular allowance - it's like being on welfare. You're not reinforcing good habits. You're saying that regardless of how good or bad you are, you're getting this amount, and it doesn't tend to teach responsibility. 4. Teach Them to Invest Allow them real experience with money - with adult guidance. Maybe you could show them how to open a trading account with a broker. Start them off first with a virtual trading account, there are many free options out there and let them experiment with different strategies. Many of these virtual accounts have tutorials and explanations on the different strategies available and they can play with the money as much as they want in a 'sandbox' with no real financial consequences. The background of the market is still as real as you can get. Some sites even offer rewards for the most profitable traders every month and these can be an incentive for children to learn and grow their financial literacy. Once they gain some confidence, perhaps allow them to invest some real money. This teaches them responsibility and helps them gain confidence in handling real money and investing it, taking away that 'fear' of investing many of us grew up with.
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