1. Introduce Pocket Money
If your kids are at an age where they’re interested in buying their own toys, then it’s time to introduce pocket money. In order to help them truly understand the value of a dollar, they need to be presented with opportunities to earn their own money, instead of relying on the bank of mum or dad. After all, they might think twice about asking when they realise they will have to do extra chores for weeks to earn that toy or those lollies.
It's a great idea to set them up with weekly chores and a set allowance they can earn for carrying them out. If your child has something special they want to buy with their money, give them the option to carry out extra chores to earn even more to reach their goal. Taking them to the shops, or jumping online, and showing them what they can buy with the money they have earned is a great way to teach them the value of a dollar. It might be tempting to encourage them to save every penny (surely they don’t need yet another stuffed toy!), but it’s important to let them make their own decisions and learn in their own time.
They might think twice about asking when they realise they will have to do extra chores for weeks to earn that toy or those lollies.
2. Play Games
Nothing gets through to kids like fun games, plus it’s a great opportunity to spend some quality time as a family.
Start with the family favourite: Monopoly. They even have a junior version that you can start with younger kids, so the concepts are introduced nice and early. Games are a great way of teaching, without kids realising this is happening. From counting money, to earning money and buying things, Monopoly is a great insight into the world of money.
With Christmas still fresh in everyone's minds, check out Kit's simple guide to talking about Santa’s budget with your kids, and store this information away in your mind for next year.
You can also find plenty of online games and activities that help introduce the concept of money. From planning an imaginary party to teaching them where money comes from, there’s plenty out there. Here’s another easy activity for you to try today.
3. Gift Money
Gifting money for a special occasion might seem a little boring as a parent, but kids just love it. It’s a chance for them to add to their hard-earned savings, or simply go out and buy something they really want. Putting them in control of their spending and letting them head into the store and pick out their own gifts can be a great learning experience and memorable moment of independence.
It’s also a good opportunity to introduce the idea of value for money. If they have their eye on a particular toy, give them money for their birthday and then show them how to shop around. Sit with them on the Internet and look up the price of this toy in a number of different stores. Show your child how shopping around and comparing prices can help them save money that they can then use to buy other things. When it’s their money they’re spending, they will love learning how to make it stretch even further.
With the Kit App, you can even get relatives involved. Hand over your child’s BSB and Account Number and let them contribute for special occasions as well. They will love knowing the money is going directly into the child’s account for them to do as they please.
When it’s their money they’re spending, they will love learning how to make it stretch even further.
4. Offer Savings Incentives
While it’s important to let your kids spend their money as they see fit, this doesn’t mean you can’t nudge them in the right direction with a little incentive. How you do this is entirely up to you.
Try setting up a savings goal with them. Tell them once they reach that goal, you will double their money, or simply add a set amount on top. With an incentive to reach their goal, it will make it easier for them to say ‘no’ to all those temptations every time they head to the shops. This concept of delayed gratification is an important one for them to learn early.
You can also use this concept for rewards as well. If you want to celebrate a good report card or other achievement, you can give your child a choice: here’s $10 to spend as you please, or we will give you $20 if you put it into savings.
The idea is simple, and it helps to instil the importance of saving money.
5. Bring them into the family budget
As your child grows, so will their understanding of money and everyday life. When they’re old enough, sit them down and include them in any talks you have about the family budget. Whether you have a spreadsheet set up that you go through each month, or take a look at your spending and reassess every few weeks, this is an important life lesson that will stay with your child and actually set them up for the future.
It's amazing how many children fly the nest with little clue of just how much things cost. From council and electricity rates to weekly food shops and more, many parents leave their kids out of these cost-of-living talks thinking they are protecting and providing for them. Really, it doesn’t do your child any favours at all. Send them out into the world prepared by bringing them into your family budget talks and setting them up with financial capability for life.
6. Learn with Kit
Don’t have Kit yet? Sign up to Kit today and begin your children’s journey to financial literacy.
Consider the PDS, FSG, TMD and other important information at heykit.com.au/legal. Any advice given is general in nature and does not take into account your objectives, financial situation or needs so please consider whether it is appropriate for you.