Financial literacy is one of the most important topics to us, and there is no better time to start teaching kids about it than in 2022!
If you have read our other blogs about financial literacy, or FI for the “cool kids”, you know that it’s such a critical tool in our lives lacking in the current Australian school curriculum.
So, it comes to you, parents, to teach the little ones how to earn, budget, and respect those dollars and cents.
For a lot of children, money is infinite. This idea is probably one of the things I miss about childhood besides not throwing my back out getting off the sofa. It’s essential to be open and honest about money with your kids without worrying them about it, and explaining how the finances of the family work and how everyone can do their part to help the household budget will teach them the importance of money management and financial literacy.
Earn their own
Many parents still give their children allowances, which is excellent, but making them do chores will help them feel a sense of accomplishment and reinforce the idea that if they want money, they need to work for it. Adding odd jobs around the house, such as stacking the dishwasher or washing the family car, for extra cash is a great incentive not only to get things done but for them to understand the value of their efforts.
Most kids have that “big thing” that they want to buy, the latest fade toy or tech. Take these opportunities to show them how many weeks it would take them to save their chore money to buy it. In talking with some parents, some of them use this to teach kids about loans and offer to give the children some money to buy their item, but the kids need to pay it back. Some experts agree with this, while others insist that this reinforces the “buy now, pay later” mentality the current adult generation has, which can hurt personal budgets, but that’s a blog for another time.
Track & Save
Helping the kids track their money is a great way to teach them budgeting and monitor their money. A simple chart on the fridge or in their room that allows them to add and subtract money earned or spent will let them know where they stand with their money.
Giving the kids a place to keep their savings is also important. Setting up an actual bank account for them for their spending money might be overkill, though setting one up for them for long-term savings is advised but also a blog for another time.
A jar or money box kept out of reach is an excellent recreation of a bank account. They know the money is safe and have access to it when they want, but they need you to get it. It saves the coins going walkabout as well.
These little steps will help your kids learn the value of money and how to handle it. It may be only the initial steps in lifelong learning about financial literacy, but it’s a start nonetheless.
If you need a brush up on your financial literacy or want to discuss your finances with one of our experts to see where you can save more and start that “Less Debt More Life” journey, you can contact them now for a risk-free appointment.