The best – and easiest – thing you can do when introducing your kids to the world of money is to talk about it – openly, honestly, and regularly.
Talking about money doesn’t need to be a big deal. Just include your child in conversations about money whenever you can.
We’ve got a guide for introducing kids to world of money, but here are a few ideas to get things started:
Next time you tap to pay for a coffee
Explain how that machine is talking to the bank where you keep your money. Tell them about how you’re able to buy the coffee because you’ve worked to make money.
When you go shopping on the weekend
Point out the price tags on different items, and talk about how we need money to buy what we want. Make a game out of finding the prices in each shop you visit.
As you’re doing the weekly grocery shop
Talk to your child about the cost. Ask why two different items – an apple and watermelon if they’re young, or similar cookies if they’re older – might have different prices.
2. Get some money flowing
If you really want to teach your child about money, think about giving them some of their own. That could be as a little regular pocket money, or as a reward for helping out around the house.
When your kids are a bit older, why not encourage them to make money outside the house. Even before they’re first job, kids can earn a bit of extra cash from washing grandpa’s car, making cards to sell at school, or walking a neighbour’s dog.
And don’t be afraid to have some fun with it! Now is a great time to show kids that making money doesn’t have to be boring. Work can be something you enjoy, as well as something you need to do.
The power of pocket money
Pocket money is a great tool for teaching children about the world of finance. But what’s the right amount?
Truth is, there’s no hard and fast answer. It depends on your family situation, their age, and your values.
As a guide, the going rate per week for the average Aussie kid is between $5 and $7 for kids under 10, and then between $8 and $12 for those over 10 years. At the end of the day, do whatever feels right to you!
3. An account of their own
While cash and piggy banks have their place, setting your child up with a bank account is a great way to teach them about money.
When you do set up their first account, try to involve your child in the experience. Explain what a bank account is, and how it can help to keep their money safe. Show them how to check their balance, and make it easy for them to do it whenever they want.
It’s important that children feel ownership over their money – it is theirs, after all. If your child is old enough, talk them through the idea of interest. Explain how the money that goes into their bank account grows over time because the bank will pay them interest.
4. Find a reason to save
Saving is much more exciting when you have a specific reason for doing it – whether you’re a kid or a grown-up.
Encourage your little one to dream up something they really want, and work together to figure out how much they’ll need to save each week to make it theirs.
For younger kids, try making a savings chart together and sticking it somewhere prominent in the house. That way, they can actually see their progress – and how much longer they have to go.
Getting started with savings can be tough, especially if you’ve got a big goal in mind. The same goes for kids – excitement can easily fade as time goes by. While reaching their goal will be a great reward, keep the thrill alive with rewards along the way.
If your kiddo has a big dream in mind, work with them to make some smaller goals along the way. Then you can add to the excitement by planning a special treat when they hit a goal, or kicking in some extra cash to mark a milestone.
6. Leave room for mistakes
Letting kids handle their own money means they’ll make some mistakes – but that’s okay.
Don’t get us wrong, it’s hard to watch your kid mess up when it comes to money. You’ll be tempted to step in, but do your best to give them the space to make their own mistakes – sometimes, that’s the best way to learn. Just make sure you’re there when things go wrong.
Instead of protecting them from failure, you can help them pick up the pieces and figure out what they can do differently next time.