What to do with your kid's Christmas 'aginaldo'

BDO Unibank Inc.

Posted at Dec 31 2017 03:46 PM | Updated as of Jan 05 2018 03:18 PM

Is it too early to teach children healthy money habits? If financial experts are to be asked, the earlier, the better.

As early as infanthood, children receive red envelopes or "aginaldo" from their godparents and relatives. Soon these gifts can build into a tidy sum.

This is why it is also important for them to know how to keep the money for future use, and to avoid unnecessary splurging, so that they won't get into trouble later in life.

Most children view money as a convenient thing they can use to buy candies or small toys at the corner store. However, parents can teach their kids the value of each peso, by helping them keep it in a coin bank or bank account.

Children can then work to maybe save for a bigger purchase during a special occasion, or to have their own little fund for emergency use.

Here are some healthy money habits you can teach your kids in time for Christmas: 

1. Start small with a coin bank

The simplest way to introduce kids to money saving habits is to let them have their own coin banks. Parents can make it more fun by letting their children decorate a plain coin bank. This can help them develop a sense of ownership and responsibility over the coin bank.

Once they have their coin banks, children can then follow a plan to drop a certain amount into their coin banks each day, week, or month.

2. Make a savings chart goal

Once children have been introduced to the idea of having a coin bank, it is best to create a goal chart with them to guide them on how they should save money. 

The goal could follow yearly, monthly, weekly, or even daily milestones, which they can tick off. This can help kids feel that they have achieved something with their money.

3. Talk to your kids constantly about spending and saving

As their money grows, children might start to want to buy things, and insist on using their "aginaldo".

If this happens, parents can let their kids make a small purchase, at least once. This way, they will appreciate how spending money works, as well as the value of cash, and the items they purchase.

4. Be a good example 

Kids are said to imitate those around them, so parents need to set a good example.

Parents should avoid spoiling their kids with too many high-priced toys that would be abandoned quickly for another shiny new item. It can also be good not to say "yes" every time children ask their parents for a toy, and to explain why it is not practical to quickly buy every new thing that the toy store offers.

Instead of buying too many toys with aginaldo money, parents can also teach children to gain pleasure from everyday family interactions or planned outings such as picnics or a trip to the amusement park, or playing with friends, instead of relying on shiny new things for joy.

5. Open a bank account

While coin banks can be a good money-saving measure, it is not advisable to keep money in there for a long time, especially a big chunk of cash. 

Not only are coin banks vulnerable to damage or theft, it can also be tempting to smash it to use the money inside. The money is also left stagnant instead of being allowed to gain interest, or other benefits of being deposited in a bank.

A child-friendly savings account such as BDO's Junior Savers Account can help youngsters learn healthy money habits, and more easily see that their aginaldo can grow if it is put in the right hands.

For as low as P100, parents (or even godparents) can open an account for their child. Their savings can start earning interest upon reaching a P2,000 deposit balance.

Money can also be transferred from a parent's existing BDO Account to their child’s BDO Junior Savers Account using the auto transfer facility.

Children from ages 0-12 years old are qualified for a BDO Junior Savers passbook, while children aged 7-12 years old may also avail the ATM Debit Card.

For more information and details visit www.bdo.com.ph/junior-savers. 

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