We put so much planning and thought into our children’s future, but we often neglect to teach them about the value of money. Our Penrith Branch Manager David Saad has a few simple ways we can impart the proper financial knowledge and habits to our kids.
One of the things we commonly find at The Greater is that while our customers are fairly savvy when it comes to the more complex financial topics like Home Loans and Credit Cards, they could do with a bit more advice when it comes to budgeting and saving.
This is no-one’s fault, merely a result of a less than perfect financial education.
What this problem does, however, is present us with the opportunity to better educate our children on money matters so they are better equipped to deal with whatever comes their way.
While we want our children to maintain the carefree existence they are entitled to, there are little things we can do now that will help them become better savers later on. The sooner we can impart to our children which are the good and bad habits when it comes to money, the better.
Early Days 1-5 years
OK, so I know parents of new-borns might roll their eyes when I say this, but try to involve your kids from an early age when you visit the check-out. No matter what stage of development, familiarise your kids with the process of paying for things, and use a mixture of cash and card so they can tell the difference. If possible, letting your child help when paying for small purchases with cash or coins can be very beneficial to their understanding of money and its value.
When we have small children, it can be too easy for us to want to spoil them. Every time we pass through the checkout, the temptation to reward them or placate them into behaving can be too much. But one of the first saving habits can be instilled in your young ones by simply saying “NO”. Treats from time to time are OK, but to give in every time is showing a bad example.
Growing Savings 6-9 years
Once your children are school age, they’re going to begin asking for things they’ve never asked for before. The expensive toy you have no idea existed, the TV for their room, and every parent’s worst nightmare, the mobile phone. Suddenly, more expensive consumer goods are on the radar. Don’t let this scare you – it’s another chance to teach a good habit. If your child receives pocket money, let them set up a savings goal so they can save their weekly allowance and buy what they want for themselves. This will teach them both independence and the value of consistent, measured saving. The Greater’s Savings Goal calculator is perfect for this – check it out today.
And if your young one has a goal to save for, this is the perfect time to open them their first savings account. Having their own account will let them save their pocket money as well as any monetary gifts for Birthdays, Christmas, etc, and will give them a sense of independence. They can watch their money grow and will be encouraged to reach their savings goal to get what they want. The Greater’s Little Bucks Account is a perfect starter as it offers no account keeping fees or transaction fees, and can be opened with as little as $1.
Independent Savers 10-17 years
During this age, you might find that teaching your children independence is the least of your worries! You may feel at times like you’re fighting for a lost cause, but be persistent – the lessons they learn in Saving now will stay with them throughout their adult life.
Your kids will be interested in getting their first part time job during this time, so you may want to show them the value of maintaining one account for their income and pocket money, and one account strictly for savings. The idea of a savings account which actively grows your child’s savings will teach them to put money aside and avoid the temptation of dipping into the cookie jar. The Greater’s Bonus Saver Account is perfect for this as it pays a high rate of interest if you make at least one deposit and no withdrawals in any given month. See more here.
There will be times where you think you’re not getting anywhere, but these are the times to be the most patient. Even if it doesn’t seem like you’re making progress, your kids will absorb the habits you teach them and will use these as the basis of their relationship with money for their adult life.
So make sure you’re setting the best example you can.
If you think we’ve missed an easy win when it comes to teaching your kids the value of money, share your tip with us in the comments below.