Need Help? Email us: [email protected]

5 Major Reasons Why Young Singaporeans Should Learn About Financial Literacy

Education ,   Learn ,   Skill

by CashOctopus • October 3, 2019

The importance of having financial literacy cannot be overstated. More importantly, it is best to inculcate the importance of good financial literacy from a young age. This way, children will most likely hold on to this invaluable lifelong skill that will last time their lifetime. 

At some point in life, all of us will have to handle our own finances. Whether it is personal finances or business funds. This is where financial literacy will come into play.

It is therefore very important that young Singaporeans are taught how to manage their money. Unfortunately, the school system in Singapore does not actively teach or advocte the importance of financial literacy in the school syllabus. Thus, this leaves a gap in the general knowledge of many young Singaporeans.

The general guidelines of the school system in Singapore are given below.

1. Preschool

Schooling starts at preschool level in Singapore. If you have a child between 3 and 6 years, he or she should be enrolled as a preschooler. Many of the pre-schools in Singapore are managed by individual companies or charities. They usually charge fees and the costs vary greatly from preschool to preschool.

The education system in Singapore gives children in pre-school the foundation of English language and other creative skills subjects. At this stage, your child will be given the basic knowledge needed to transition into primary school. There is no teaching on money matters even at a very fundamental level.

Since your preschooler will not be taught anything about finance in school, it is wise for you to teach him or her some simple principles. The following are some ways in which a preschooler can learn financial literacy.


You could have a clear jar where your preschooler saves coins. The increase in the savings will be clearly seen by your child as more coins are placed in the jar. This will instill the financial concept of discipline and saving in your child.


When the child wants a toy or chocolate, you could encourage him or her to withdraw the amount from the savings in the jar. This will teach him or her the principle of spending only what is available.

2. Primary School

The next stage after preschool is primary school. Children in Singapore are expected to join primary school at the age of 7 years. This stage of schooling is free and compulsory in Singapore. There are penalties meted out on those who do not comply. If you choose to homeschool your child or enroll him or her in an institution that is not under the management of the Ministry, you are required to obtain special permission from the Ministry before proceeding.

There is no subject on financial literacy taught at primary school level in Singapore. Therefore, as a parent, you could teach your child the following financial principles that will be helpful to him or her at this level.

The importance of costs

At a primary school level, your child will be able to understand the costs of different items. For example, if he or she requests to get a video game, you could emphasise that this would mean foregoing having a pair of new shoes. Your child will learn at a very early stage that sometimes financial sacrifices need to be made because of the cost of items.

The importance of working for pay

You could give your child some simple house chores to do and then pay him or her a commission for work done. Your child will learn that money needs to be earned, and that there is no such thing as a free lunch. He or she will also appreciate the value of the commission because it has been earned through hard work.

The dangers of impulse buying

This is another financial principal that you can teach your child at primary level. If he or she wants to buy something impulsively, it will be important for you to advise him or her on the importance of prioritising spending.

The importance of giving

Children in primary school can easily be taught the principle of giving and sharing. Guide your child in choosing a charity or worthy cause where he or she can give some amount of cash on a regular basis. This is a very important financial principle and it will help your child to develop a healthy habit of generosity.

3. Secondary School

The next stage of education after primary school is secondary school level. In Singapore, children in secondary schools are usually aged between 13 and 16 years. The general subjects offered at secondary school level are English, Mother Tongue, Elementary Maths, Additional Maths, Chemistry, Physics, Biology, Geography, Social Studies, History, Design and Technology, Physical Education and Music.

Out of all these listed subjects, your child will be required to choose a minimum of six subjects. Out of these six subjects, English, Elementary Maths, Chemistry, and a humanity must be chosen. Your child could choose a combination of eight or nine subjects. The subject choices are limited to sciences and humanities, and there is no subject in financial literacy.

Teenagers in secondary school can be taught several guidelines on the management of finances. The following financial principles can be taught by parents since they are not offered in the school curriculum.

The tracking of expenses

You can teach your teenager the importance of tracking all his or her expenses. This can be done by simply having a note book or downloading an app to record everything spent. This will help your child not to overspend on unnecessary items.

A culture of saving

You can instill in your child a culture of saving by giving guidance on how to spend his or her allowance. It is important that you limit the amount that you give to your child as an allowance so that he or she can learn the discipline of saving up to buy things.

Guidance on how manage an account

If your child is at least 16 years old, you could open up a bank account for him or her and give them guidance on how to manage it. This will help them learn the discipline of handling a bank account at an early age.

Guidance on how to budget

It is vital that you teach your teenage child how to draw up a simple budget and stick to it. This is a great principle that will help your child to avoid numerous financial problems later on. Once he or she grasps the financial discipline of having a budget, the other aspects of finance will be easier to handle.

Guidance on debt and interest

The teenage years are a good time to enlighten your child about debt and all the consequences of defaulting, plus interest rates. This will help him or her to avoid taking on excess debt later on.

Once your child has completed secondary school, he or she can pursue college or university studies as a young adult. This is an important transition into adulthood. It will be more challenging for those Singaporeans who have never been taught financial literacy.

5 Reasons Why Singaporeans Should Be Taught Financial Literacy

1. Prevents overspending and encourages budget controls

When a young person is taught financial literacy, there are several things that he or she will be guided through. For example, he or she will be taught the importance of sticking to a budget. As well as the way to prioritise expenses, and the importance of self discipline. This will help to prevent any kind of overspending and can result in the creation of an emergency fund to cater for unexpected costs. There will also be minimum cash flow problems once proper budgeting is done.

2. Build investments

Young people who have been guided through financial literacy usually make early investments in stocks and other assets. This way, they end up with a good amount of income in the long term. These long term benefits can come in handy during retirement when the investor is not able to generate a consistent income.

3. Prevent a financial crisis

Youth who are well informed about financial management will also be able to avoid any extreme financial crises later on. They will have the wisdom to avoid taking too much debt or living beyond their means. This will also help to prevent any cash flow problems. Many cases of financial crises are caused by poor financial planning.

4. Helps to avoid too much debt

Young people who are taught financial literacy are able to avoid accumulating too much debt. This is because they are fully aware of the consequences of defaulting and having a bad credit score. With this information, they ensure that they borrow manageable amounts that can be repaid easily.

5. Will be able to teach the next generation

Young Singaporeans who have grasped the principles of financial literacy will most probably pass them on to the next generation. This is especially important in cases where there is a large inheritance of family assets to be handed over to the next generation. If the next generation is not trained on issues of financial management, then there is the danger of the family assets being lost due to mismanagement.

As a conclusion, financial management should be incorporated into the school system so as to ensure that the young people in Singapore start life on the right footing.