FINANCES: Raising financially savvy kids

07 June 2017
Reading time3 minutes

When the latest book club order arrived, my children decided to buy something from it using their pocket money. I asked my six-year-old to go and fetch ten dollar coins from her piggy bank for the book she wanted and she returned with ten cents. Nice try, I thought at first. But then I thought, she probably doesn’t know the difference between cents and dollars as my children very rarely handle money.

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.

Talk about money   

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.

Bills, bills, bills

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.

Family budgets

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.

Save up for something

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.

Raise critical thinkers

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

Do you give your child pocket money? Find out how their piggy bank compares to other Aussie kids here.

Written by

Kerry White

Kerry is the Senior Writer for Kids on the Coast and Kids in the City. Kerry moved to Australia from England in 2013 with her husband and two daughters. She worked as a sub-editor in London for seven years before she had her girls. She now calls the Sunshine Coast her home and is making the most of its glorious weather and beaches. She enjoys baking, especially when she has a glass of wine in hand, and is a part-time Psychology, Criminology and Justice student. She also shares her home with two cats and her daughters' imaginary dogs.

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