SINGAPORE: A recent study by MoneySmart found that 46% Singaporean adults are “actively trying to go against parents’ money mistakes.”

The study, involving 1000 Singaporean adults, examined how parents’ financial habits affect their children when they grow up. It found that if parents overspend, shop without thinking, or have debt problems, their children often do the same later in life.

Over half (56%) of Singaporeans think their parents influence how they handle money. The study also found that 46% actively try to break away from their parents’ bad money habits.

People who saw their parents overspend or shop impulsively often picked up these habits themselves. The same goes for those whose parents had debt problems.

Specifically, 59% of respondents whose parents were prone to overspending and 63% of those with impulsive shopping habits admitted to displaying similar behaviours.

Moreover, the study showed a connection between parental and offspring debt struggles, with 58% of respondents whose parents had experienced debt issues reporting similar challenges in their own lives.

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Influence of parents in forming financial habits

The study showed that many Singaporeans copy their parents’ money habits without realising it. This habit starts when they are kids and continues into adulthood.

Financial coach Michelle Howell from Frolic for Life in Singapore says kids absorb their parents’ money habits, even if it’s subconscious.

“Fundamental money habits can start to become formed from as early as 6-7 years old and are often developed by watching how parents behave with money whether consciously, or unconsciously.

During our formative years, we tend to absorb and internalise what our parents do and say about money, with our parents’ spending or saving habits, adherence to societal norms, or unique money behaviours often shaping our own beliefs and behaviours,” she said.

Although nearly half of Singaporeans are working hard to avoid their parents’ mistakes, 62% are keen to pick up their parents’ good money habits.

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In the study, 66% of people said their parents taught them about money when they were young. Surprisingly, those who learned money management as kids were 1.3 times more likely to be “financially secure” later on.

The study found that five main money lessons were commonly passed down from parents to their children:

  • 59% of parents taught their kids to create a savings plan.
  • 49% of parents taught their kids to keep track of expenses.
  • 48% of parents taught their kids to seek good deals.
  • 46% of parents taught their kids to always pay debt on time.
  • 41% of parents taught their kids to build an emergency fund.

82% of Singaporeans believe parents should teach their kids good money habits, including saving and budgeting. 83% also believe it’s important for them to learn about financial products like credit cards and loans when they’re old enough.

To see all the findings from the study, check here. /TISG

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