Updated: October 15, 2026
Many of us grew up with an alkansya on a shelf. It might have been a clay pig, a bamboo tube, or a plastic container that once held biscuits. We dropped coins into it and waited for the satisfying sound of a growing collection.
That simple habit taught us an important lesson: money grows when we are patient.
Today, we can build on that lesson and introduce our children to something more. We can teach them how money can grow through investing.
You do not need to be rich, have a finance degree, or know every investment product. You only need a simple plan, a little patience, and a willingness to learn alongside your child. Below are tips.
Why Start Early?
Children who learn about money early have more opportunities to develop good financial habits before they become adults.
Think about the everyday experiences of a Filipino child. The price of their favorite snack changes. Their school supplies cost money. Their baon has to last until dismissal. These ordinary situations are opportunities to introduce budgeting, saving, and eventually investing.
Inflation provides another useful lesson. When prices rise over time, the same amount of money buys fewer goods and services. The ₱100 that buys several items today may not buy as much years from now.
This helps children understand why saving matters, but also why saving and investing are different.
Saving keeps money available for future use. Investing puts money into an asset with the goal of earning a return over time. Investments, however, can lose value, and their returns are not guaranteed.
The other advantage of starting early is time.
Imagine two people who want to build wealth. One starts investing small amounts at age 10 with the help of a parent. The other waits until age 25. The first person has more years for contributions and potential investment growth to accumulate.
Of course, the goal is not to make children worry about becoming rich. It is to help them understand how money works while they are still young enough to develop healthy habits.
Begin With the Basics: Needs, Wants, and Saving
Before talking about stocks, bonds, or mutual funds, make sure your child understands what money is for. A good starting point is their daily or weekly cash allowance.
Ask your child to divide the money into three categories:
- Spend. Money for food, transportation, school supplies, and other planned expenses.
- Save. Money for a future purchase or an unexpected need.
- Share. Money they may use to help others or support a cause they care about.
Younger children can use three clear jars. Older children can keep a notebook or use a simple spreadsheet.
The amounts do not have to be equal. What matters is that your child begins to understand that money has different purposes.
You can also explain the difference between needs and wants. Food and transportation may be necessary, while an extra toy or another collectible may be something your child wants but can live without.
Avoid turning this into a lecture about every small purchase. Give your child room to make age-appropriate decisions. If they spend their money too quickly, let the experience become a lesson rather than immediately rescuing them with extra cash.
Let Them Save for Something They Want
Next, help your child choose a savings goal. It could be a toy, a book, a bicycle, or a pair of shoes. Agree on the target amount and track their progress together.
Suppose the item costs ₱600 and your child saves ₱50 each week. They can reach the goal in 12 weeks, assuming they consistently set aside the money.
When they finally make the purchase, talk about the experience. Was waiting difficult? Did they feel proud of reaching the goal? Would they make different spending decisions next time?
These small experiences teach patience, planning, and delayed gratification. Those habits will become useful when your child eventually learns about long-term investing.
Once they understand saving, introduce a new question: “What if your money could earn more money while you wait?”
That is a natural way to begin talking about investing.
Explain Investing in Simple Words
Children understand abstract ideas more easily when they can connect them to things they already know. For instance:
Stocks: Owning a Small Part of a Business
Think about a sari-sari store. The owner buys products, pays expenses, and sells goods to customers. If the business earns more than it spends, it may make a profit.
Now imagine a much bigger business, such as a company that operates supermarkets, produces food, or provides telecommunications services. When you buy shares of a publicly listed company, you become a partial owner of that company.
You may benefit if the business grows and its share price increases. Some companies also distribute dividends to shareholders. But there is no guarantee of profit. A company’s share price can fall, and dividends can be reduced or stopped.
You can explain it to your child this way:
“When you buy a share, you own a tiny part of a real business. If the business does well, your investment may benefit. But if the business struggles, your investment can lose value, too.”
Bonds: Lending Money to an Issuer
Explain how bonds work differently.
When you buy a bond, you lend money to an issuer, such as the Philippine government or a company. In return, the issuer promises to pay interest under the bond’s terms and repay the principal at maturity, provided it can meet those obligations.
You might explain it this way:
“Imagine lending money to someone who agrees to pay you interest and return your money on a certain date. A bond works in a similar way, except that the borrower is a government or company, and the agreement has specific rules.”
Risk: Why Investments Do Not Always Make Money
You can use the price of grocery or market items to explain changing prices. For instance, track and show how the price of tomatoes or chicken may increase one week and fall the next.
Similarly, discuss how investment values also change. Ask your child to think about why a company’s share price might fall. Perhaps sales declined, costs increased, or investors grew worried about its future.
Then explain an important rule: a falling price does not automatically mean a business is bad, just as a rising price does not automatically mean an investment is good. Investors need to understand what they own, why they own it, and how much risk they can afford to take.
For a young learner, there is no need to discuss every technical detail. The first lesson is simple: investing offers opportunities for growth, but it also involves risk.
Show the Power of Growth With Real Numbers
Numbers help make investing feel real. Try this example with an older child.
Suppose you set aside ₱500 every month and invest it for 10 years. Assume the investment earns a hypothetical 6% annual return, compounded monthly. And note that the difference between the total contributions and the future value comes from the assumed investment growth.
Here is what the illustration looks like:
| Item | Amount |
|---|---|
| Monthly contribution | ₱500 |
| Investment period | 10 years |
| Total contributions | ₱60,000 |
| Assumed annual return | 6% |
| Approximate future value | ₱81,940 |
| Approximate investment growth | ₱21,940 |
This example assumes contributions are made at the end of each month, and the monthly return is 0.5%. It excludes fees and taxes. Actual investment returns vary, and a real investment may earn less than 6%, earn nothing, or lose money.
You can draw two bars on a sheet of paper. One represents the ₱60,000 contributed. The other represents the approximate ₱81,940 future value.
Ask your child where the additional money came from. This is an opportunity to explain compounding, which happens when investment earnings remain invested and can generate additional earnings over time.
You can also demonstrate the reverse. What happens if you save less each month? What if the investment earns a lower return? What if you withdraw the money early?
Let your child experiment with the numbers. The goal isn’t to promise a specific amount of wealth. It is to show how contributions, time, and returns can affect the outcome.
The Rules for Minors in the Philippines
Children can learn about investing long before they can independently open every type of investment account. That’s why parents should understand the difference between teaching a child to invest, investing money intended for a child, and opening an account legally owned by a minor.
Investment providers have different requirements. Some arrangements may allow a minor to be named as a beneficiary or account holder under a specific structure, while others require the adult to own and manage the account.
Before opening an account, ask the provider:
- Can a minor legally hold this type of account?
- Must a parent or legal guardian be the account holder?
- Can the child be named as the beneficiary?
- What identification documents and minimum amounts are required?
- Who controls the money, and what happens when the child turns 18?
Do not assume that the rules for a bank savings account also apply to a stock brokerage account, mutual fund, unit investment trust fund (UITF), or other investment product.
Start With a Savings Account
For younger children, a savings account can be a practical first step. Many banks offer accounts designed for children, subject to their eligibility requirements and documentation. A parent or guardian may need to participate in opening or managing the account.
A savings account is not the same as an investment fund. Its primary purpose is to hold money safely and provide access to it, although it may also earn interest.
Use the account to teach your child how deposits, withdrawals, interest, and account balances work. You can also show them how to read a transaction record and check whether the balance matches their own records.
These are useful skills that will serve them well when they become investors.
Explore Government Securities Together
Once your child understands saving and basic financial concepts, you can introduce government securities.
Retail Treasury Bonds (RTBs) are peso-denominated debt securities issued by the Philippine government through the Bureau of the Treasury. They allow investors to lend money to the government under specific terms.
Recent RTB offerings have had a minimum investment of ₱5,000, but the amount, interest rate, maturity, and subscription period depend on the particular offering. Always check the latest announcement on the official Bureau of the Treasury website.
You can sit with your child and examine a bond’s maturity date, interest rate, payment schedule, and minimum investment. Even if you do not buy anything, reading the terms together helps turn a financial product into something understandable.
Other Options to Learn About Later
As your child gets older, you can introduce other financial products available to eligible adults.
- Pag-IBIG MP2. A voluntary savings facility for eligible Pag-IBIG members, with a five-year maturity and dividends that are not guaranteed. It can help illustrate how a longer savings horizon works.
- Personal Equity and Retirement Account (PERA). A voluntary retirement savings and investment arrangement designed for eligible contributors. It introduces the idea of investing for a specific long-term goal.
- Mutual funds and UITFs. These pool money from investors and invest according to a fund’s objectives. Their risks, fees, and possible returns depend on the fund.
- Exchange-traded funds (ETFs). These are traded on an exchange and can provide exposure to a group of securities through a single investment.
These products are not interchangeable, and they are not all appropriate for children. Some are intended for eligible adult investors or have specific membership requirements. Treat them as subjects to explore as your child matures, not as a shopping list of products to buy.
The goal is to teach your child how to evaluate an investment, rather than encouraging them to open accounts simply because a product is available.
Practice First With a Pretend Portfolio
You do not need to invest real money on day one. In fact, a pretend portfolio can be a better starting point because it lets children experience price changes without risking their savings.
Choose three or four publicly listed companies whose products or services your child recognizes. These might include a food manufacturer, a telecommunications company, or a bank. Write down each company’s share price on a specific date. Then track the prices every month.
Encourage your child to research each business. What does it sell? Who are its customers? Where does its revenue come from? What might cause its business to grow or struggle?
Ask questions such as:
- Why do you think this company’s share price changed?
- Does the company make something people need or want?
- What might happen if its costs increase?
- Would you still want to own this business if its share price fell?
- Why might owning several different companies be less risky than owning just one?
Explain that a pretend portfolio has limitations. It does not fully capture the emotions involved in losing real money, and tracking a few share prices does not replace proper research.
Still, it is an excellent way to introduce observation, curiosity, and long-term thinking.
After several months, you can discuss whether a small real investment makes sense for your family. If you decide to proceed, choose an appropriate account arrangement and invest only money that you can afford to leave invested for the intended period.
Teach Them About Diversification
Once your child understands individual stocks, introduce another important concept: diversification.
Explain that the basic idea behind diversification is to reduce concentration risk, although it does not eliminate the possibility of losses. Clarify that investments can still fall together during a market downturn.
You can demonstrate this concept with a simple game.
Give your child 10 pretend investment coins. Ask them to allocate all 10 to one company, then compare that choice with dividing the coins among several different businesses. Discuss what might happen under different scenarios. What if one company performs poorly? What if an entire industry struggles? What if the whole stock market declines?
You do not need to teach portfolio theory to a grade-schooler. The essential lesson is that putting all your eggs in one basket can expose you to unnecessary risk.
Use Special Moments as Teaching Opportunities
Birthdays, Christmas, graduations, and other family celebrations often bring cash gifts. Instead of immediately deciding what your child should do with the money, involve them in the decision.
You might suggest dividing a gift into three parts: spend some, save some, and invest some. For example, a child who receives ₱1,000 could allocate ₱500 for spending, ₱300 for saving, and ₱200 toward a longer-term goal.
The amounts are only an illustration. The appropriate allocation depends on the child’s age, needs, goals, and existing savings.
For a younger child, the investment portion can initially go into a pretend portfolio. For an older child, you might use the occasion to review a suitable real investment held and managed under the appropriate account arrangement.
The same principle applies when a parent receives a bonus or 13th month pay. You can explain how you decide which portion to spend, save, invest, or use for an important family goal. Children learn that financial decisions involve choices and trade-offs.
More importantly, they see that managing money is a normal part of everyday life.
Teach Them to Recognize Scams
Financial education should include protection from fraud.
Children are exposed to online games, social media, influencers, and advertisements. As they grow older, they may encounter investment promotions that promise unusually high or guaranteed returns.
Teach them to be suspicious of claims such as “double your money in one month” or “guaranteed profits with no risk.”
Explain that legitimate investments have terms and risks that must be understood. Anyone offering an investment should be willing to explain how it works, how returns are generated, what fees apply, and what could go wrong.
As your child gets older, teach them how to verify a company’s registration and the relevant authority to offer the specific investment product. Registration alone doesn’t guarantee an investment is suitable, safe, or profitable. Your child should also learn to question unrealistic promises, avoid sharing account credentials, and never send money simply because someone online claims to have an excellent opportunity.
A healthy level of skepticism is one of the most valuable investing skills you can teach.
Be a Good Example and Stay Patient
Children often learn more from what parents do than from what parents say. If you talk about your own savings goals, emergency fund, and plans for the future, your child sees that money is a tool for making choices and preparing for uncertainty.
You can also share your mistakes. Perhaps you once bought something you did not need. Maybe you failed to save enough for an important expense. Or perhaps you invested in something you did not fully understand.
Share these experiences in an age-appropriate way. Explain what happened, what you learned, and what you would do differently today. You do not have to pretend to be a perfect financial role model. In fact, showing how you learn from mistakes can make financial lessons more realistic.
Most importantly, avoid making investing sound like a race to get rich. Do not pressure your child to compare their savings with those of classmates or relatives. The goal is to develop good judgment, not to raise a child who measures their worth by the size of their bank account.
In Summary
You don’t need to be a financial expert to help your child feel comfortable with money.
Start with their cash allowance and developing a saving habit. Teach your child to distinguish needs from wants, save toward a goal, and make thoughtful spending decisions.
When they are ready, explain investing through familiar and everyday scenarios. Show them how stocks represent ownership, how bonds work, and why investment returns are never guaranteed.
Use pretend portfolios to make learning fun. Explore government securities and other financial products together, but check the rules for minors before opening an account or investing real money.
Teach diversification, patience, and scam awareness. And remember that your own financial habits are part of the lesson.
You do not need to give your child a large amount of money to get started. You can begin with a few coins, a simple savings goal, and a conversation at the dinner table.
Every small lesson can build toward a larger understanding. By helping your child learn how money works today, you are giving them something more valuable than an early investment balance. You are helping them develop the confidence and judgment to make better financial decisions throughout their lives.
What to do next: Click here to start your financial journey with IMG Wealth Academy
