| Talking to your kids about money and using everyday experiences is a great way to help them develop a healthy attitude towards personal finance. Studies show that kids learn most of their financial knowledge from family, so it’s important to give them the right information in a form they can understand.
From pocket money to budgeting… here are some tips.
Handling money
Start by encouraging your child to handle different coins and notes. Play simple counting games using coins as counters. When you go shopping let your child pay the shop assistant and count the change together.
Play shop
Games are a great way to build money savvy kids. Set up a supermarket at home using groceries from the cupboard. Take turns as the shopper and the shop assistant.
Plan your shopping trip together
Before you go shopping, write a shopping list together. A shopping list is an easy way to explain the difference between 'needs' and 'wants'. Ask your child to check off items as you put them in the trolley.
Earning Money
Consider giving your child pocket money in return for small chores around the house. Pocket money can be a useful way to explain earning an income.
Set savings goals
Ask your child to set a savings goal. Offer to match their savings or "pay interest" as a further incentive.
Establish savings habits
Encourage your child to develop good savings habits. One way to do this is to open a bank account. Take the time to explain any transactions on their monthly bank statement.
Discuss purchasing choices
Talk with your child about how you make spending choices. The next time you go shopping compare products and prices along the way. Discuss which items represent the best "value" for money.
Family meal time
Meal times can be a great way to demonstrate how the family budget works. Begin by choosing a menu that your child is familiar with. Write a shopping list of all the ingredients that you need and set a clear budget before you head off to the shops.
Set a budget
Set a budget for your child's next birthday party. Make sure you involve them in planning the food and games.
Family budgets
Show your child some of the household bills. Mobile phone and utilities accounts can be a great way to explain the hidden costs of running a household. Household bills can be used to encourage energy saving by comparing previous bills and seeing how to make improvements.
Make money visible
Let children see how you pay for things either through the ATM, with EFTPOS card or over the internet. Explain that you have to have money in your bank account to use these services. Explain that credit cards are a way to "borrow" money and it must be paid off.
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