As a parent you have an important role to play in teaching your kids about money. This can be a challenge as you may feel torn between giving them what you can but at the same time wanting them to be responsible with money. The best place to start is with you. By being better with money yourself you are teaching your kids to be better with their money.
Where did you learn your money attitudes and habits from? Our parents usually influence how we deal with money – even if we decide not to do what they did! You can set a good example for your kids by following some good, basic money management habits yourself, and reinforcing the lessons your kids are taught in school.
Get into the habit and take control of your money!
Write down what comes in and where your money goes each fortnight.
Are you spending more than you earn? Which items in your budget would you
describe as essentials and which would you describe as extras? Is there any
room to make changes?
Setting goals gives you something to work towards with any savings you have
found from your budget plan. Make your goals realistic. No matter how big or
small the goal is, the key is to work out how much you need to save and how
long it will take to get there. Talk to your kids about the family’s goals and help
them to identify their own goals too.
The secret to successful saving is to start now, no matter how small the
amount is. And don’t forget to look at your super. Superannuation is a
form of saving for your retirement and the sooner you take charge of
it the better off you will be. One of the consultants at PDFinancial Group can help you determine how much you need in retirement and explain some options.
Pocket money is often the subject of much debate among parents. You might find that the kids raise it with you before you’ve decided which way to go.
Think about your values and what you want to achieve with pocket money, decide on your approach, and explain your reasons to the kids. Pocket money can teach children the basics of budgeting. It can help children to learn about prioritizing their spending, which is the key to successful budgeting. They have a finite amount of money which they have to manage. It can also be used to introduce the idea of saving. Here are a few thoughts to help you manage the pocket money issue:
Decide on your goals for what you want to achieve with giving pocket money.
Be clear about what you expect your kids to do with the money. For example, do they need to use it for their canteen lunch at school? (Is it to be used for treats of their choice?)
Decide if you will pay a regular amount each week or whether you will only pay if certain jobs are done, like setting the table or making their bed.
Start early - talk to your children about money and help them to establish some good habits from an early age.
Show kids the value of money by explaining what $2 can buy.
Let them watch you pay for things – allow your child to hand over the money or press the OK button on the EFTPOS machine.
If you are giving pocket money, give a combination of notes and coins. This helps to familiarise kids with the different denominations and can assist in teaching them how to allocate money.
Teach kids how to compare prices and shop around. Use things that they like as examples.
Include your kids in conversations about the family budget and bills. (depending on how old they are of course)
Show older children what bills look like and how you plan to pay them. This is especially good for teenagers, considering the amount of money they spend on mobile phone bills!
Get your kids into the savings habit by helping them start a savings account. A good saver is HSBC saver with a high interest rate.
Assist them to identify their goals and how they are going to reach them. Be realistic – make sure they can reach their goals.
To make it fun, encourage small children to draw pictures of what they want to save for. This, along with any tricks you have picked up along the way should set your kids up to have good savings habits.
Paul Davies
