Cashless kids need to learn the way of world
THERE’S a wonderful feeling of self-worth that comes with earning your own money and furthermore achieving a savings goal with that money for something important to you.
Saving can be a challenge for many people and something that if learnt at a young age can develop healthy habits and important financial skills over time.
In a time of cashless transactions and purchases, teaching kids about money goes a step further than my education on money of putting the copper coins out of dad’s workbag into a Dollarmites passbook and watching the balance creep up ever so slowly from Prep to Grade 6.
When I was little it was fairly simple, if you had money you could buy it, if you didn’t you had to wait and save up.
Kids today see us tap a card at the checkout and we get what we want. It’s invisible money.
Not seeing money exchanged for purchases makes it harder for kids to get their heads around what things cost. Educating them on the fundamentals behind how this is made possible is crucial.
My son was quite young when we implemented the 50 per cent spend and save rule in our house.
This is where all money earnt or received as a gift is split into half. Half spent now on something special. This way he can have some immediate gratification and show the giver what he has bought with their generous gift and half saved and invested for his future.
There are many day-to-day opportunities to start conversations with your kids about money.
When you are getting money our at the ATM. Explain how the ATM holds the money you have worked hard to both earn and save. It’s not just hole in the wall where money magically comes out.
When you are doing your weekly shopping. Explain to the kids how you can compare prices for the same products on different brands or how buy buying more than one item of something you use a lot of may save you money.
Sit down with them and build a family budget and a personal budget for them.
This helps by giving them insight into the cost of family life and how much you can then save for special things like a day out or family holiday.
An important disclaimer here is to only include children where this is a positive experience.
While we want our children to understand the real life fundamentals of money, including them on conversations that involve any level of financial stress is obviously not a good idea.
There are some fantastic resources available online and in apps to teach kids in all stages about money and developing lifelong financial habits. Sam Stevenson is an authorised representative and credit representative of JSSJ Financial Pty Ltd (ABN 556 126 054 37) trading as Edge Advisory Partners is an authorised representatives of AMP Financial Planning Pty Limited, Australian Financial Services Licensee and Australian Credit Licensee