Teaching our kids about money
When is a good time to start talking to your kids about money?
At what age do they begin to understand it’s value?
If you’re thinking about these things - that’s a great start.
Each family is different. However, it’s never too young to introduce ‘money’ into your conversations and games with your kids.
Teaching kids about money gives parents the opportunity to instil financial values and lay a foundation they can build upon in the future.
Getting a piggy bank
Of course, we all want to protect our children from the realities of financial stress - and rightly so! But being honest about affordability in the smaller sense helps to build important understanding about the way the world works.
Basically, it’s just about showing them that - stuff, costs money.
If they are asking you to buy them something, just taking the time to explain how a purchase works, then helping them save some money for it - will help them develop their money sense.
Giving them some small chores and paying them an allowance is a great place to start. They can work towards their goal of buying that gift - and get the feeling of accomplishment that comes with it!
Using a clear jar to save helps kids see their hard work building up. The good ol’ piggy bank is a great idea, but it doesn't give kids a visual.
Here is a great article from ASIC
with some tips on giving kids pocket money.
A bank account, for a child?
No, this is not over the top! And here’s why.
We are moving closer to becoming a cashless society. Teaching your child about how bank accounts work and helping them to see their savings grow in this way will help them to understand how transactions work - and the benefits of things like interest!
Bank accounts also give you an opportunity to go through a bank statement with your child. You can show them when the money went in, how much the balance of the account is and the interest paid.
You can turn it into a fun activity - ‘let’s go to the bank and deposit your pocket money!’
Your child can walk in and watch the process, get a receipt and get the satisfaction of seeing the numbers on the account increase.
The CWCU Pocket Rocket Saver
can be your child’s first step into saving.
It’s available to school students (aged 12 years and under). Our staff love seeing our members come in with their kids and we all make a big fuss whenever a pocket rocket makes a deposit!
Setting an example
As your children get older, they will learn the most about money from the way you spend it.
Once you define the financial values and behaviors that you feel are most important, you can take actionable steps to instill those values in your children.
If you’re eating out a lot, often getting the ‘latest version’ of things (cars, phones, televisions) - that’s great, if you can afford it. But having a conversation with them, explaining how fortunate you are to be able to afford these things and how hard you have worked to get them - is really important.
If you’re more frugal and sticking to the essentials, with the occasional treat - explain to them that food and bills come first, while treats and inessential purchases come second.
It’s all about priorities!
Other ways to get kids engaged
Stress the importance of giving. When you go to buy their friend a birthday present for their upcoming party, take the kids with you!
Help them experience the joy of thoughtfully picking a gift, parting with the cash to buy it - and seeing the happiness on their friend's face.
Explain to them how charities work - that there are some people who are less fortunate, who need help. You could even explain how some charities work and get them to pick one they want to donate to.
Bank accounts for kids
Learn more about our Pocket Rocket Saver