Do you know how your kids spend money? Because many don't!
Do you know how your kids and helpers are spending money? According to a recent study, most Singaporean parents don’t really know how their kids and helpers are spending the money that they give them.
We do it without batting an eyelid – hand over cash to our kids for the daily allowance or to our helpers for grocery shopping.
In fact, a comprehensive study of 790 respondents, conducted by YoloPay and theAsianparent.com, found that 96% of Singaporean parents rely on cash as a way to give allowance to their children and domestic helpers.
However, rarely do we ask our kids to account for every cent spent with proof of receipt. We just assume that the cash is being use for what it is meant to be used for. But the same study shows that there is also a significant discrepancy between how parents believe their kids spend, compared to how their children actually spend their allowance.
So, what is really going on?
Our kids and their spending habits
According to the study, parents believe that top 3 categories their kids are spending on are food (63%, on and off campus), stationery and school-related items (19%), and transport (9%).
However, parents this is not how kids actually spend their money. A previous study on teenage spending habits*, reveals clothing and apparel as the top categories kids spend most in. The third category is a more worrying one: kids are spending heavily on ecommerce and online gaming.
Where are you going wrong?
There is limited transparency in cash spends, making accounting for it difficult. Out of the 790 respondents surveyed, 62% of parents account for their children’s allowance spending through verbal updates; 25% get no information and only 7% ask for receipts.
Parents are aware of the problem in monitoring cash their kids spend. 40% worry that their kids spend on unnecessary items, and 20% are concerned about their kids losing money.
This inability to monitor their kids’ spending habits, is troubling for many parents. If this process was less opaque, 79% of parents say that they would consider giving more pocket money to their kids.
Why you should change this
Financial savviness does not have to wait till adulthood, it can be learnt from a very young age, especially if parents take responsibility for their children’s financial education. The most basic principles that they need to learn are that of saving and spending prudently. At the moment it seems that not many parents are taking their children’s financial education seriously.
Do you trust your domestic helper with your money? Click on the next page to see what other Singaporean parents feel about it.
To view the full infographic reports on this study, click below:
1) Infographic report on household spending among the young
2) Infographic report on how domestic helper manage household spend
Money management by helpers
Managing household-related allowances for domestic helpers is similar in general lack of transparency. According to this research, an estimated $224 million is managed by domestic helpers annually, with 69% of Singaporeans encountering no problems when they entrust their helpers with money.
However, yet 32% of respondents say that they do not trust their helpers with money, with 63% of Singaporean parents believe that helpers should not be responsible for shopping at all. But this stems from a lack of transparency in cash spends and the lack of trust that comes with it.
“There are just too many horror stories. I’d rather manage the risk”, said one respondent.
A solution in sight
An understanding of this challenge in accounting for cash given to their children and their helpers and the unease that accompanies it led to the creation of YoloLite – a mobile app and that together with MasterCard prepaid debit card will make lives easier for Singaporeans.
According to Ravi Patel, co-founder of YoloPay, “YoloLite helps parents move and manage money within their families with features designed exclusively for families. The goal is to give control back to the family.”
He adds, “According to a MasterCard survey, young Singaporeans under 30 are less financially literate than those over 30 and with looming economic uncertainty, families will need to pay more attention to how their households are spending money to ensure safe and responsible spending.”
Georgette Tan, Group Head, Communications, Asia Pacific, MasterCard, says, “Managing money can sometimes feel complex but households in Singapore are more empowered to take charge of their finances than ever before thanks to the myriad of new tools available to help manage and track spending. Taking advantage of such services provides families with greater control of their finances coupled with increased transparency and enhanced security, making money management easier and more convenient for everyone.”
So take charge of your family finances and give more autonomy to your kids and helpers. Just remember to download YoloLite first.