Vacation lessons – Navigating my child’s finances while on holiday

Summer months brings family vacations, and I recently travelled to Nagoya, Japan, with my family, committed to teaching my 7-year old tips on how to manage his money while on holiday.

Like all concerned parents, I Googled for tips on how to “teach your kids about money while on holiday.” The pro-advice I gathered filled me with grand expectations from Oliver, my 7-year old, becoming a forex expert and a historian who could appreciate the cultural context of the Japanese Yen.

What was I thinking…tsk tsk.

As my journey in Nagoya came to an end, I have compiled my learnings and three of my not-so-lofty tips, grounded in the reality of ever-changing variables such as time, place, context and the ever-scientific mood swings of both child…and parent.

What encapsulates my three recommendations is intention with flexibility. Without intention, one is constantly grappling for answers and alternatives. Kids know when you have not thought things through and trust me, they can see you whipping out the phone and searching for answers on Google or ChatGPT. With clear intentions, I have found that there were many ways (some planned, some opportunistic) to get a semi-well thought-through answer from my son.

Tip #1 – Grow the child’s awareness

A day before the flight, I sat Oliver down with a spinning globe that my wife uses as a teaching aid. I asked him to locate both Singapore and Japan. We discussed the differences in simple greetings, country size, population, weather, food, and currency. I wanted him to be aware of these differences and what it means to travel to a different country and experience a different culture.

As luck would have it, during our period of travel, 1 SGD roughly equated to 100 JPY, so currency conversion via division was much easier while showing him the different denominations of the Yen and coin / note combinations.

Tip #2 – Give the child an age-appropriate responsibility

Vending machines were at every corner throughout our journey in Japan, selling canned and bottled drinks between 100 to 160 JPY. It was decided (by me) that Oliver would carry a coin pouch and be in full control of vending machine drink purchases. Whenever we had coins, we would pass some to Oliver’s vending-machine war chest and he enjoyed counting the coins and slotting them into the machines and getting the drink and change.

To enhance the learning, and make him understand his spending, we would always ask him how much the drink would cost in SGD after conversion (divided by 100). There was some initial guessing but as confidence grew, his answers became second nature. Soon he was able to go back and forth between currencies and he started to price other things – specifically toys - he saw, in SGD.

Tip #3 – Give the child a budget

The reality is that kids will see toys and knick-knacks that they like and the pleading with parents to purchase those toys will never end. This is heightened on vacation. That is the reason why I gave Oliver a budget, from which he could withdraw when he wanted to buy something. I explained once the budget was finished, there was no overdraft, no more toys. Naturally, the budget blew halfway through the trip.

Oliver bargained for additions to his budget. Hesitant, we allowed him to take from his other pot of savings, the money from his Lunar New Year collection. He was not thrilled to tap on his savings, as he understood this would reduce the money he could later spend on other things. In a way, this is an encouraging sign as it shows me that he is beginning to understand the value of financial security and does take that into consideration whenever he wants to spend on something. However, he did use some of his precious money to buy a couple of toy trains for his younger brother – something we encouraged wholeheartedly. Sharing is caring.

Reflections

Over the 10 days in Nagoya, it was a joy to see Oliver grow in his worldly understanding. He has built up courage and confidence to count and dispense coins of a foreign currency. He can identify the JPY total on a receipt and convert it into SGD. He also surprised us by throwing in the occasional “Ohayo,” “Arigatou” and “Sumimasen” as we interacted with locals. While his budgeting skills remain raw, he is starting to grasp the concept of opportunity cost.

I do not presume to claim victory in what I set out to do (I’m still too tired from the trip to contemplate that). What I do know is Oliver’s journey of money management will continue and the last 10 days was just a building block.

I hope, above all things, that his memories of the trip are mostly happy ones.