Every year on 31 October, countries around the world are reminded again on the importance of savings through the global event called World Savings Day. With its origin dated way back to 1924, this 90-year tradition was first conceived by the World Savings and Retail Banking Institute (WSBI) with the core missions to increase awareness on why it is important to save and also to promote the habit of saving among the people.
Fun fact, when World Savings Day was first declared 90 years ago – eventhough its core missions have remained the same throughout the years – it was initially established to instil the idea of saving money in a bank, instead of keeping it the old-fashioned way, under the mattress.
Today, World Savings Day is celebrated by people around the world with various money-related initiatives taking place around this special day. Likewise, Perbadanan Tabung Pendidikan Tinggi Nasional (PTPTN) has also participated in this movement with its very own annual Bulan Menabung SSPN 2020 held from 1 October until 31 October 2020, which champions Malaysian parents to save for their kids’ future and education by offering numerous activities and contests.
Although PTPTN’s Bulan Menabung SSPN 2020 will end tomorrow on 31 October 2020, in line with the World Savings Day that is also happening tomorrow, PTPTN wants to reiterate its belief that Malaysian parents should be the key to providing a financial safety net for their kids’ future and education, and also in driving early financial literacy for their kids. After all, the best way for kids to learn is through example, and the best time to do so is always as early as possible, starting at home.
If you haven’t already started, here are some tips to help you:
Start Saving For Your Kids As Early As Possible
You might have heard it too many times that “It’s not cheap to raise a child.” In fact, this is a reality for Malaysian households where parents would need to spend between RM393,000 and RM1.3 million on average for a child from birth to graduating higher education. According to the National Population and Family Development Board (LPPKN) Malaysia, this high cost is commonly attributed to the expensive cost of baby products and foods, babysitting and nursery fees, in addition to the cost of education, which is rising faster than inflation.
Taking all these factors into consideration, the earlier you start saving for your kids, the better it will help you manage your financial situation in the future.
When To Instil Good Money Habits In Your Kids? As Early As Age 3
If you are wondering when would be the best time to talk about money with your kids, at age 3 might be the earliest for you to do so. This is because at 3 years old, kids can already begin to understand the basic concept of money. Besides that, another reason why you should start as early as you can is because money habits are formed in kids by age 7. In this case, the proverb melentur buluh biarlah dari rebungnya rings true when it comes to cultivating good money habits in your kids in the future.
How? By Setting A Good Example & Starting Simple
It is a known fact that kids learn by imitating what they see. By practicing good money habits yourself, you will naturally cultivate the same positive habits around money in your children. Start with a simple habit that you know your kids will be able to imitate. For example, you can set up a tabung in the living room, where everyday you will put in RM1 and at the same time encourage your kids to do the same. For older kids, you can try planning for groceries with your kids, where you can take this opportunity to justify why you need to buy them, instead of why you want to buy them, thus helping them to identify needs versus wants.
Of course, besides these two examples, there are many available resources online on how to teach your kids good money habits that you can explore.
Take Advantage of PTPTN’s National Education Savings Scheme (SSPN)
Given the rising cost of higher education, a savings account that offers annual dividend payout such as SSPN can be a great way for you to start saving for your kid’s education. By the time he or she enters a higher learning institution, the annual dividend payout would have multiplied and matured, just in time to fund for his or her higher education.
Available in 2 types of accounts – SSPN-i and SSPN-i Plus, setting up your kids’ education funds can be made easier, especially for SSPN-i Plus account which offers savings packages with monthly commitments from as low as RM30 per month (Intan package) to up to RM500 per month (Berlian package). These savings packages cater to Malaysians from all walks of life, giving them the freedom to choose any suitable amount that they can commit monthly.
Besides securing the future of your kid’s education financially, SSPN also offers benefits for parents by providing tax relief up to RM8,000 based on the annual deposited amount. Additionally, SSPN can be a great “tool” for parents to regulate withdrawals since it only allows full or partial withdrawals once your kid is enrolled into a higher learning institution, or has decided to drop out for exclusive reasons.
For more information about PTPTN’s initiatives in conjunction with World Savings Day, visit PTPTN’s Bulan Menabung 2020 page here. If you see any activities or contests you are interested in, you might still be able to participate before the campaign ends tomorrow on 31 October 2020. If you missed it, you can always save the date for next year. You can also sign up for an SSPN-i or SSPN-i Plus account for your kids here.