Teaching Kids About Money

What’s your earliest money memory? Will our children have these memories or know the ‘value’ attached to money? The more I think about raising socially and emotionally conscious children, the more I compare generations. I remember seeing the exchange of physical money my parents would spend compared to today where it can be a mere tap of a card and you’ve made a purchase in store or online with After Pay when you can physically have a product in your hands before you’ve even paid the total price. I remember being a ‘Dollarmite Kid‘ and depositing money into a youth account through Commonwealth and did you even know that these still do exist? The conversations of cost, budgets and monetary value are no longer seen or in some aspects discussed in front of children. I’m yet to know if this is a help or hinderance. But what I do know is that maths and the value of money is important otherwise it wouldn’t be in our school curriculums.

Recently my three year old son came home with a Spider Man figurine. My mum had taken him out for a couple of hours and walked into an op-shop. Now, while it’s not everyone’s cup of tea, my mum looks to buy vintage/antique pieces and not even often for herself but rather for my grandmother. My mum thought I would freak out not because my sone came home with just another ‘toy’ but because it was from an op-shop. For a whopping $3, how could she have said no to him when his eyes lit up to see this ‘super-hero’ he has come to love (and never even watched the movie). Was my son to know it was pre-loved? It looked like any other Spider Man you would see in the shops minus the packaging so of course I didn’t freak out but appreciated that my son loved it and he didn’t care that it wasn’t brand new or at a much higher price.

What families are truly teaching their children the value of money? Or are we all caught up in a world where we live beyond our means? Are we teaching children that we need to make money to spend money? Are we giving children chores around the home? How much money is the ‘Tooth Fairy’ delivering to your home per tooth? Or are we continuing to give the next generations the same ‘entitled’ label as we have?

The importance of teaching financial skills

It can be safely assumed that if kids develop a sense of good financial skills early on, they’ll be able to survive financial challenges of adulthood. Giving your children a good foundation and teaching them about the value of money and money matters in life, it will give them a good sense of personal development and understanding of survival. Teaching children how to budget, spend and save will enhance good money habits and make them a ‘savvy money manager’.

Australian Securities and Investments Commission’s (ASIC) Money Smart gives parents advice on how to encourage money awareness and value in children.

Invisible Money

Online shopping, credit cards, internet banking and After Pay are all ways of purchasing products without the exchange of physical money in note and coin form. This way of making purchases can be abstract for young children. Ensure your children are aware of what an ATM card is and what it represents to help them understand the invisible money is real and not an unlimited resource.

Practical Ways to Raise Money Smart Children

  • Shopping lists – as children to help contribute to the ‘needed’ items for home. The bare minimum of what you need for the week that children are aware of can be discussed with ease; think breakfast, snacks, drinks, shampoo and conditioner, toothpaste and any other items they may use on a daily aspect.
  • Research purchases – look at brochures, see if a child can spot on product (maybe milk) in each brochure. What has the best price? This is what your children will learn in Year 2 so why not put it into context?
  • Goal setting – Help your children ‘save’ for something they want. Use a savings chart so they can see a visual representation of the value of money. For older children, set up a bank account and show them online what they have in their account. With high school children, start to discuss savings accounts that can incur interest, essentially getting them more bang for their buck.
  • Needs vs wants – help your children identify what they need and what they want. This doesn’t mean holding them back from what they want but help raise awareness. Prioritise their ‘wants’ on a list. What do they want the very most?
  • Encouraging gratitude – it makes people happy to give therefore allow children to accept gifts, help and money but encourage them to be grateful and allow them to know that it made someone happy to give to them. That way, children may one day be able to give back and know the feeling associated with the gift of giving.
  • Keep tension talks away from the children – if there are money issues in your home, that is ok but try not to give the children a sense of anxiety around the topic of money by arguing in front of children. We want to raise financially aware children not instil a sense of fear around the topic of money.
  • Pocket money – read on.

 

Giving Children Pocket Money

If it sits well with your family, giving kids regular pocket money is a positive way to develop money sense as well as encourage independence, patience and goal setting. While growing up, I would hear my friends and other families speak of ‘pocket money’. I too was giving opportunities to earn pocket money over the years. As a teacher now, I very rarely hear children helping around the home with chores or being given opportunities to receive pocket money.

Is there a right or wrong? No. And I am not here to judge. What I am here to do is question what happened to this idea of doing jobs around the home or learning about the value of money in the home? Why does it seem to be left until children are exposed to the school curriculum? I think sometimes we get so caught up in the fast-pace of our lives that we sometimes just simply forget, I know I am guilty of this at times.

I remember vividly some children would get pocket money just to get pocket money. Nothing had to be done, it was simply received. While other children would have a weekly job or chore list to complete if they wanted to receive the money.

Here is some insight from ASICs Money Smart:

 

What does money talk look like in your family? I’ll give you a penny for your thought! hello@millennialmama.com.au 

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