Start ‘Em Young: Teaching Kids the Value of Money

Published with BDO -- Being financially-savvy is a vital life skill that we should teach our kids. But how do we do so if we’re not so great in it ourselves? Here are a few easy tips on how to teach our kids everything about money.


Nothing says or signifies adulting as much as getting your very own paycheck and paying your first set of bills. Earning our own money signifies being financially independent — it means we can already pay for our own needs, wants, and everything in between. Because whether we admit it or not, money plays a huge part in everything. Every move we make every day entails cost — from the meals we take, our commute to and from work, and even the Internet and cable services we relax to every night. And although we’ve heard time and again that money cannot buy happiness, it pretty much comes close as it is critical to our existence in this day and age.

Critical as it may be, the bad news is not everyone can be considered as financially-savvy. And when it comes to finances, it’s a sink or swim situation. There’s no escape from finances and we have to learn how to handle it ourselves because otherwise, we’ll sink to the bottom. And as parents, it is also our responsibility to ensure that our kids know the value of money so that they’ll have a better chance to stay afloat their finances once they grow up. Clueless on how to do so? Then here are a few tips on how to teach your kids everything about money and how to budget, spend, and save.

Talk about it at home.

We sometimes try to shield our kids from all the bad stuff and “worldly matters” that we feel they cannot understand yet and most of the time, this includes all money and financial matters at home. Well, when it comes to money, exposing and teaching our kids its value are best done early. If your child has played “shop” or “restaurant” during his toddler years, then you might have noticed that he quickly grasps the concept of “exchange of goods” — asking you for play money for every meal he serves or toy he gives. So this gives you a great opportunity to introduce the basic concepts and value of money to him.

At the same time, you can logically take this further as he grows up by speaking openly about money matters at home. Don’t excuse him when you’re discussing your family’s financials — such as your family’s financial capacity and any upcoming bills that have to be taken care of. Letting him hear money discussions allows him to be aware of it and its importance. It also allows him to witness how you and your partner handle it, which can then allow you to impart important money lessons that could help him make financially sound decisions as he grows up.

Make your own “spend, save, and give” jars.

It’s quite common for kids and even babies to get their own money early on — which may come as “pakimkim” or ang pao during celebrations, their baptism and birthdays, and Christmas holidays. All these could equal to quite a substantial amount so it’s a good idea to give him his own “spend, save, and give” jars. These can be as simple as 3 jars or 3 store-bought piggy banks that you and your child have personalized (or even not) and labeled, but the important thing is to get your child to understand the concepts behind each. So be sure to label or color-code each as:

Spend — use this money for small trips or his small “wants.”

Save — use this money for items he feels that he “needs” or bigger “wants.”

Give — use this money to help out someone in need or a cause that he believes in.

Next, discuss with your child the idea that for every money he receives, he needs to allocate some to saving, some to giving, and the rest to spending — personally, I’d recommend allotting a higher percentage on saving and keeping the spending to a minimum for kids. So for example, you can agree with him that for every 100 Pesos he receives, he can put 50 Pesos in the Save jar, 30 Pesos in the Spend jar, and 20 Pesos in the Give jar. As he grows up, this system can also include all the allowances he gets so that he’ll know the value of earning money from hard work.

Don’t give your child an open credit line.

In real life, there’s no such thing as an open credit line or an unlimited source of funds, so do not give your child the impression that it exists by giving him free rein in the toy store or mall. Even if you can afford to spoil him every once in a while, stop. Consider that it is in his best interest to provide him choices and limits — because doing so will give him an awareness of money and its purchasing power. Never give him the impression that money will always be available to him. If he sees something that he wants in the toy store, tell him that he has an X amount currently in his Spend jar and he can buy it with his own money. If the amount in the Spend jar is not enough, tell him that he would have to save up for it until he does. You can also ask him to evaluate if the item that he’s eyeing is truly worth the amount or if another slightly more expensive item is more “sulit,” in which case, he would have to wait before spending. Doing so will allow your child to re-evaluate his spending priorities — giving him much needed practice for adulthood. You might even be surprised once he tells you that an item or toy is “not worth it if I have to use my money.”

Practice what you preach.

Us parents are our kids’ most important role model, especially during the early years. So it’s important to lead by example if we want to teach them life skills, and this includes managing and budgeting our money. Show your child the importance of budgeting by exposing him and even seeking his assistance when you’re budgeting your household expenses. Ask him to help you add up bills and expenses, and subtract from your income. If you use the envelope method, ask him to help count up the bills with you and set aside each for every expense. Doing so will allow him to witness firsthand the importance of budgeting and what it actually costs to maintain your standard of living.

At the same time, being perceptive of your financials and spending wisely will also teach your child that it is possible and important to live within your means. Living it out yourself is way more effective than telling it to him over and over again.

Get him a Junior Savers Account.

Opening a bank account for your child exposes and allows him to be well-versed in dealing with financial institutions — he cannot save in jars forever and it will allow him to get into the habit of dealing with money matters and saving. So you can set a regular schedule for him to take his savings from his Save jar and deposit it into his own account.

The good news is BDO offers parents the best way to teach their kids how to save with their BDO Junior Savers. With the BDO Junior Savers, we parents can open a passbook account for our kids even before they turn 1 year old and until they reach 12. Minimum deposit is as low as 100 Pesos and we can easily transfer money from our existing BDO Savings Account to our kids’ Junior Savers Accounts via Easy Saver or BDO Online Banking. BDO Junior Savers also allows our kids to grow their own money with a 0.25% gross interest rate per annum for accounts with a minimum amount of 2,000 Pesos. An easy-peasy way to start your child on his road to financial literacy.

Kids aged 7 to 12 years old can open a BDO Junior Savers Account under their name by simply presenting the following documents to any BDO branch: a valid school ID signed by a school principal/head, passport, and an NSO/PSO-certified birth certificate. On the other hands, kids below 7 years old can avail of the Junior Savers Account under a parent or guardian’s name. The parent/guardian will need to present the following documents to any BDO branch: at least 2 valid government-issued IDs and the child’s passport, NSO/PSO-certified birth certificate, and adoption or guardianship documents for the guardians.

Please visit or any BDO branch to learn more about BDO Junior Savers Account.

*Published with BDO.


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