Make small change
Children know more than their parents think they do about money, and it’s never too early to begin that conversation, writes Anthony Keane
PARENTS are being urged to recognise that their children are smarter than they think when it comes to learning about money.
As more than seven million children around the world take part in Global Money Week activities from today, financial literacy specialists say children can develop good money habits early.
Rise High Financial Solutions director Marissa Schulze rewards her children Eleni, 6, and Billy, 4, with dollar coins for household chores and good behaviour such as being kind or helpful.
“They know exactly what they have to do to get $1,” she said. “If they see a toy at the shop for $20, instead of them thinking of it in dollar terms, which can be hard for a young child to understand, they see it as 20 good deeds.”
Ms Schulze said credit cards and ATMs had made it harder for children to understand the value of money.
“Kids do not necessarily join the dots that their parents had to work hard for the money, and that there is a limited supply of money,” she said.
Kendall Flutey, CEO of financial literacy program Banqer, said research had found that by age seven children are forming financial habits.
“That’s a lot younger than most people are probably having those conversations,” she said.
Her program, in partnership with investment company Netwealth, simulates earning, spending, saving and investing in classrooms and aims to be in 250 schools this year.
She said parents could engage children with similar lessons in the home, and should talk about insurance, mortgages, interest rates and superannuation.
“At times we are guilty of assuming that these conversations aren’t for kids,” Ms
Flutey said.
“Bring them into the fold, but be clear that the conversations stay in the house.”
New research by comparison website finder.com.au found that 45 per cent of parents involved children in household shopping and budgeting. “Integrating conversations about budgeting into real life situations is a powerful lesson,” Finder spokeswoman Bessie Hassan said. Ms Schulze said parents were a child’s biggest financial influence and should lead by example. “They will watch how you manage money – including your struggles and wins – and they are likely to adopt your money habits when they become an adult.”