Teaching Kids To Earn, Invest And Save Money In Hong Kong

Top tips from a certified public accountant and father.

Given how important personal finance skills are in life, it’s surprising that many schools don’t teach children about money. As parents, it’s our responsibility to help our kids navigate life. I have often wondered (as you might too!) when is the right time to start teaching them about the concept of money — including how to earn, invest and save it. What is the best way to approach these lessons? Are there any tools available that can assist in this endeavour and when can my child start earning money for themselves? Here are some of the methods I have used with my children, which should help you find an appropriate way to teach your own kids about the value of money.

Read more: 5 Ways To Financially Prepare To Be A Parent In Hong Kong

When to start teaching kids about money

Most children are highly receptive to new information. I’ve read that children from as young as 3-years-old can grasp financial concepts. This was true in my children’s case, as I started educating them when they were 4-years-old. My first task was to teach them what money is and to do my best to instil a responsible attitude towards saving and spending it. To facilitate their learning, I would give my kids $5 pocket money every week for them to put in a piggy bank. They could then use this to buy the toys they wanted.

Explaining how money is earned

In the early years, I used physical money as a visual tool to help them learn maths. Eventually, I stopped giving them the $5 and, instead, began providing a small allowance in return for them completing simple chores at home. I told them that their money must be earned through hard work (but that they could spend their allowance however they wanted). Throughout my career, I’ve met and been very impressed by many young entrepreneurs, their drive and financial habits. Of everything I wanted to teach my kids, this was perhaps the most important lesson – the value of an honest dollar.

Read more: Kids’ Pocket Money: When To Start And How To Do It

Tools to teach kids about money

As my kids are quite tech-savvy, I tried to find practical applications of my lessons through mobile apps. iAllowance is an app I frequently use to help teach my children about earning, saving and spending. I can track the chores my children have completed and the app can let me automate their allowance payments once they are done. It provides further functions that allow parents to work with their offspring to set financial goals. This helps children remain motivated in their work. Supporting over 150+ currencies, iAllowance is a fantastic tool for families around the world.

Teaching kids how to budget

As they grew older and started developing solid interests and hobbies, my children began to find things they wanted to buy. I found this was the perfect time to sit down with them to teach them how to budget. We went over how much allowance they were making each month, and what they were spending each week. The goal was to make sure that my kids were always spending within their means (I found that they were able to properly budget and make savings this way!).

Letting your child have control over their spending will instil budgeting concepts in them which can be further developed as they get older. As kids start wanting to purchase more expensive items, they need to learn that they must save money and come up with a plan to do so. It helps them understand that some items are more expensive than others and that people must save what they earn to reach larger goals.

Tools to help kids budget

Bankaroo is another app my family uses to help teach our kids financial lessons. This virtual bank is designed to teach them about money, budgeting and setting goals. It also helps them learn about being accountable for their financial decisions. Most users of Bankaroo range from the ages of 5 to 14 years. The app is perfect to help kids track their usage of funds and understand how their savings are contributing to their set goals. The application is incredibly interactive for parents as well (and allows them to be hands-on). I can add funds to my children’s accounts, view their progress online and even set up matching schemes to help them achieve their goals.

Read more: Building A Budget: Steps To Becoming Money Savvy

I realise though that I will not be able to look after my kids forever. Eventually, they will need to put these skills to use in the real world. In Hong Kong, the legal age an individual may begin working is 18 years old. However, under certain conditions, children aged 13 or over may be employed in certain economic sectors. My kids, being as driven and independent as they are, are always looking for more ways they can earn money. I’m sure they will want to earn a proper income as soon as possible (they are now 11 and 14), so I took it upon myself to familiarise myself with Hong Kong’s employment laws to understand what rules and regulations govern how your children may earn money. I’m sure that, when the time comes, there will be nothing to worry about.

A key aspect of preparing my children for the future is teaching them proper habits regarding money management. I recognise that many parents think the same. So for those who are not confident in teaching their kids financial concepts (such as budgeting) themselves, FastLane hosts workshops to provide practical advice on such skills. The aim is to help companies, parents and other individuals who want to learn financial skills applicable to the real world.

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