When I was young, I used to run to the corner shop with my coins and exchange them for lollies. Now, I buy them for my children using the cash card. We are fast becoming a cashless society. If kids aren’t handling money and getting to know the true value of it now, it might prove an even bigger task when they’re older.
Take some time to start them thinking about money now. Here are a few ideas for helping them turn into savvy little savers.
There are lots of opportunities to start a dialogue about money. Next time you are at the ATM, for example, explain that it is not just a magic hole in the wall that dispenses unlimited amounts of cash. Tell them about bank accounts and how the money you get out of the ATM will be taken from your hard-earned savings. At the supermarket, you can get the kids to pick the lowest price items and compare deals. For older kids, you can explain that it is better to buy something with cash than credit. Sit down and work out how much that car with a finance plan will really cost them.
Next time a bill arrives, show it to your child. Explain how you have to earn money to pay for things like electricity and internet use. It’s all too easy for children to assume that these things come for free – yes, it does for them at the moment, but it won’t always be that way! It’s good to plant the seeds about the value of money now.
Include the kids in conversations about the family budget. Explain that it is impossible to do everything or buy everything you want, but that instead you have to budget for these things. Show them that some money goes towards food, the mortgage or rent and other bills, and that what is left over is for those fun things and the savings account.
Instead of letting your kids splurge their pocket money weekly on little things, suggest that they save for a few weeks to buy something that costs more. You could also encourage them to earn more money towards this goal by helping to do chores around the house. You could make a chart for younger children to show their progress. For older kids, you could open a savings account and help them monitor their money.
Kids are inundated with adverts for toys, games and other exciting things wherever they go – from the television to the internet and the radio to magazines. Get them to really think about whether what they are being sold is a good purchase. Explain the difference between needs and wants. Once you raise a little doubt in their mind, you’d be surprised how far some kids run with it – It’ll save you loads at Christmas and birthday time, too!
For more tips and some great interactive games that will get your kids thinking about money, visit the Government's MoneySmart website.