SINGAPORE – Many older Singaporeans would remember the blue POSB (Post Office Savings Bank) book – an emblem of pride and financial discipline.

After every Chinese New Year, we would eagerly count the crisp new hongbao money we received before tucking them into the blue book and making a trip to the bank, where we would deposit the notes and watch the teller update the savings book.

This simple ritual with our parents marked our financial socialisation, the process where we learn about money through observation, discussion and experience. 

“Financial socialisation is how children learn about money – not just how to save or spend, but how to think and feel about it,” Dr David Teo, senior consultant psychiatrist and deputy medical director at Connections MindHealth, tells The Straits Times. 

“It’s also about trust, security and self-control – the emotional side of money that shapes later habits and confidence,” says Dr Teo, who is the father of two young kids.

Studies have shown that parental influence – the way parents teach and model financial behaviour in everyday interactions – has a significant impact on children’s financial well-being and confidence in adulthood.

Children also gain financial attitudes and behaviours from grandparents, uncle and aunties, peers, social media, and pre-school and school.

Financial socialisation starts much earlier than most people think. Children are highly observant and perceptive. Even pre-schoolers pick up emotional cues on whether money brings calm or conflict at home.

How parents talk about and handle money teaches children whether the world feels safe and predictable. 

“When parents are calm and consistent, children feel secure even when resources fluctuate. But if money is tied to conflict, secrecy or stress, they may grow up seeing it as a source of tension or shame,” says Dr Teo. 

For instance...