Teaching your kids about money and how to manage it can be daunting. Between internet banking, cards, and pay wave – money doesn’t really exist. Approximately 68% of Australian parents show some reluctance to talk to their children about money and believe that digital money is making it harder for kids to understand. Open up the conversation, encourage them to save, teach them about cash, savings and budgeting. Here are 5 tips to get started:
Start with a piggy bank or money box
Encourage your children to save their money until the money box is full! Whether the money comes from helping around the house, birthdays or even finding spare change. Once the money box is full, go to the bank together and open up a savings account. Then encourage them to start all over again!
When your kids really want that new toy or game or whatever it might be, encourage them to save up for it. Use a separate jar/money box to save up for that specific thing. Whenever they find or earn money they can decide how much of it to contribute to their savings goal or their regular money box so that they learn to make a choice as to whether to spend or save.
Keep track of their money
Make a savings goal chart. A good place to start is the price of whatever they’re saving for or a general goal, ask them how much they want to save. Then as they add money to their money boxes and savings jars, they can update the chart. Together, you will know how much they’ve saved and it will encourage them to see progress.
Talk to them about money
Have an open discussion about money and savings. Explain the benefits and disadvantages to cash, the difference between bank cards and credit cards, the variance between a salary and wages. Talk about how much products and services cost, about the average wage and how they can save. This type of open dialogue will help their understanding. Actually encourage your children to use their money to pay for something they want. This will help them learn how to count out the money required for the purchase and remind them to check their change.
Look for good deals together
It might be comparing prices at different stores and online for what you or they are looking to buy. Or maybe comparing brands and sizes for prices at the grocery store. Encouraging your children to look for good deals and specials is something fun for them to do, but also a good lesson on not spending money unnecessarily.
Please note, this article is for general advice purposes only. It has not taken into account your personal circumstances or financial goals. If you would like to learn more about how The Investment Collective can help you, please contact us today.