While most parents in Asia believe money management skills are important for their kids, few actually think their children possess such skills. Marc Fancy, Executive Director of Prudence Foundation shares how parents can change this with the help of Cha-Ching, a children’s financial literacy programme offered by the Foundation.
Money makes the world go round; but learning how to manage it is often a skill that’s not taught at an early age.
Some 95% of parents believe it is important for their children to have good money management skills, but only 13% actually think their offspring possess them; our Financial Literacy in Children study found.
“Money impacts every single person on the planet,” says Fancy. Yet ironically, it is the one life tool that is still not taught in any structured format across the globe.
To improve financial literacy in children, Prudence Foundation, Prudential Asia’s community investment arm created Cha-Ching. Developed in collaboration with children’s education specialist Dr Alice Wilder, Cha-Ching consists of a series of three-minute music videos aired on Cartoon Network to 34 million households across eight locations in Asia.
Since it was first developed in 2009, Cha-Ching has evolved into a programme that now includes a curriculum, using games and activities to instill the four essential pillars of Earn, Save, Spend and Donate. To date this has been taught in schools to over 500,000 students across Asia.
“It's designed to be a multimedia platform that doesn't matter which angle you come to it from,” explains Fancy, who was instrumental in Cha-Ching’s development and implementation. Here, he shares more about how you can teach essential money management skills to your kids, with the help of Cha-Ching.
Make it part of daily life
When it comes to teaching money management skills to kids, starting at the beginning is important, notes Fancy, as it plants the right seeds for their financial journey.
To make money values second nature for your kids, include it in their daily lives by:
- Grocery shopping together: explain why certain decisions are made, such as choosing generic products over brand name products
- Talking about money: when they receive red packets during Lunar New Year and on birthdays, discuss what they can do with that money, such as saving, spending or donating
- Saving for a goal: if your child expresses the desire to purchase a non-essential item like a toy, work together and help them save up for it, such as letting them do chores for money
For creative ways to get kids thinking deeply about money management, parents can look to activities in the Cha-Ching programme which include:
- Grocery shopping together: explain why certain decisions are made, such as choosing generic products over brand name products
- Talking about money: when they receive red packets during Lunar New Year and on birthdays, discuss what they can do with that money, such as saving, spending or donating
- Saving for a goal: if your child expresses the desire to purchase a non-essential item like a toy, work together and help them save up for it, such as letting them do chores for money
‘Calculate the Cost’: asking kids to guess the value of items in a room before revealing the actual cost to them
- ‘Calculate the Cost’: asking kids to guess the value of items in a room before revealing the actual cost to them
- ‘What If Something Happens’: talking through scenarios where an accident happens, causing a sudden need for money
- ‘Money Shadow’: getting children to spend a day with an adult and ask questions related to their purchases, like why they bought the item
- ‘How Can I Help?’: guiding kids through the process of donating to an organisation, be it through giving time or money
Is the piggy bank dead?
Although children tend to receive money in the form of cash when they are young, it is important to also teach them about ‘invisible money’ – that is, digital transactions – highlights Fancy. These not only become a greater part of their later lives as adults, but society is also rapidly moving towards being cashless.
Fancy cites the prevalence of online gaming in kids’ lives today as an example, recounting how one of his daughter’s friends racked up a hefty HKD$10,000 of purchases on their parent’s credit card. “This led to a difficult conversation that could have been avoided if these issues were talked about earlier,” says Fancy.
Not seeing actual cash being exchanged for goods or services can make it difficult for children to understand the workings of digital transactions, something Cha-Ching’s ‘Invisible Money’ episode aims to address. The at-home activity lets parents follow up by guiding children to review simple bank and credit card statements, and plan a budget.
Arm them with knowledge
If parents do just one thing, Fancy hopes that they equip their children with the ability to make informed decisions.
Cha-Ching, Fancy explains, was developed against the backdrop of the 2009 Financial Crisis, where consumer protection was a major issue. “It brought up the question of who was responsible for educating consumers and ensuring that people can make the right decisions and the right choices in their life.”
Fancy believes that financial inclusion works best when coupled with financial education – which is what Prudence Foundation hopes to achieve with Cha-Ching. To help parents raise money-smart kids, Cha-Ching’s content is designed to be rich and exciting for children, with tools to help parents instigate a conversation around money; a conversation that will be the starting point in equipping them with all they need for their financial journey ahead.