Teaching kids about money: Smart tips and advice for parents

We know kids watch everything their parents do – which means how we navigate the cost of living crisis will be crucial to a child’s relationship with money. EXPERT TIPS

FINANCE experts say the current cost of living crisis is the perfect time to teach children how to be money smart.

And the earlier in age you start creating savvy little shoppers, the better.

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Money coach and founder of Women Talking Finance, Karen Eley, said children as young as two-years-old could start to form a healthy relationship with money.

She said children observed the money habits of their parents, so setting the right example was crucial.

“Instead of lecturing about money, they’re going to absorb more information from observing how you are with money,”
Ms Eley said.

“Do you spend or save, do you work too hard for money, is money important or nothing to you? Your children will pick up as much energetically as they will verbally.”

Consistent money messages and behaviours from both parents was also critical.

“Help kids set realistic financial goals … this can be accomplished through your child’s save, spend and donate jars,” Ms Eley said.

“Set a target for each jar and help your child decide what the money will be used for.

“By setting goals for each jar, you are helping to teach several important concepts including budgeting, delayed gratification and the satisfaction of helping others.”

TIPS FOR YOUNG MONEY MAKERS

News Corp is helping Australians navigate the cost of living crisis through its Smart Savers series and by offering
daily discount offers from partner Coles.

Mozo personal finance expert Claire Frawley said creating opportunities for younger children to earn money was a great start.

“Whether that be through making their bed in the morning or helping you wash the car. Pay them in cash and give them a clear savings jar, or piggy bank, so they can watch it slowly grow,” she said. “Let them experience how much things cost for themselves.

“Before you head to the shops, tell them to take some money out of the jar, and pay for it at the checkout.”

Ms Frawley said older children should be encouraged to grow their nest egg by saving up for something big.

“Let them choose the item they want to purchase, so they feel motivated and a sense of accomplishment. This exercise will teach them the importance of being patient with your savings, rather than turning to debt through services like buy now, pay later, or credit cards for big ticket items.”

“Setting them up with a high interest kids savings account along this journey could be helpful, letting them see their money accrue and bring them closer to their goal.”

Melanie Soklevski, a mum of three who teaches her teenage children about the value of money.

TEACHING STARTS AT HOME

At work, Melanie Soklevski teaches students maths and digital technology. At home, she teachers her three teenage children to be money smart.

“I’ve always been a conscious spender and have spoken about the value of money with my children for as long as I can remember,” she said.

“My son and daughter have watched me collect Flybuys points for years and they know that I go out of my way to get as many points as I can.”

Ms Soklevski plans to not spend a cent on catering her family Christmas lunch, instead she has saved her Flybuys points and will exchange them for Coles gift cards.

She earns about $500 a year in points and receives another $50 worth of free promotional products.

Her children do part of the grocery shopping each week, browse the aisles for specials and pay for items at the checkout.

“My children are very cost savvy, and are definitely starting to take after my savings habits as they become more financially independent,” Ms Soklevski said.

“With the cost of living so high at the moment, they’re growing up in a time where they don’t really have an option but to be conscious about every dollar they’re spending.

“They’re also conscious about ways to save beyond the checkout – they love getting a doggy bag when we go out to dinner to make the restaurant bill go further, and catching the train rather than driving. We save on fuel and it feels more like an adventure for them.”