Top money lessons to teach your kids
ONCE again there seems to be big push for financial literacy to be introduced into an already intense education program at schools.
While we totally agree with the sentiment, we think the major responsibility for passing on good money skills to children is with parents.
Just as good manners and healthy eating habits can be reinforced or enhanced at school, their development has to start at home. It can be one of the most important life skills to pass on to a child and one that can mould them for the rest of their life.
It's not that difficult when you think it through, and there are some terrific tools available to help.
We've come across a couple of great new tools to help your kids on their journey to understand money.
Forget the old-fashioned piggy bank, Spriggy is the tech-savvy alternative for children. It's an app you and your child download together and then a prepaid Visa card is sent (for kids aged eight to 17) to be used for transactions.
Pocket money is then loaded onto the debit card for use by the child BUT the parent has full live transparency on how the money is used. Together with your child you set goals, spending limits and restrictions on where the money can be spent.
In a world increasingly on line, it's a terrific educational tool. The cost is $30 a year for each child.
MONEY SAVVY KIDS
A more traditional program, Money Savvy Kids has a coloured see-through Perspex piggy bank at the core of its program. But the piggy bank is divided into four chambers (with four different slots) labelled save, spend, donate and invest.
Kids put money into the different chambers and can watch it grow.
The program also sells colouring-in and activity books which cover topics such as saving, spending and consumer tips. There is also information to help parents and teachers to explain money issues.
The piggy banks cost $30 each and the activity books $5.
REAL LIFE EXAMPLES
While these tools are great but there is nothing more effective than parents sharing real life examples of using money. If you can instil streetwise consumerism into your children, they will have a better chance of surviving the financial temptations that are constantly thrust in front of them.
And your world is your classroom. Use your experiences to explain to a child about money. There is no need to formulate elaborate lessons.
Your classroom should be anywhere, anytime. For example, while preparing dinner discuss the economics of shopping for food if your child asks why you can't buy Thai takeaway again that week. When reading the newspaper or watching television, explain why you can't buy everything that is advertised.
THE ACCIDENTAL TEACHER
Parents are a child's number one role model and they study your every move … even the way you spend money.
There are two ways of teaching: unconscious (by example) and conscious (as in teaching the child about something when it occurs).
Parents need to lead by example, and also take the time to explain everyday experiences, such as why you buy two of something when it's on special at the supermarket.
Think of things from their perspective to see their understanding of what we take for granted as common knowledge.
A good example of your go-anywhere financial classroom is when you are out shopping with children and they want you to buy something expensive. They can't understand why you don't just use your plastic card and "tap and go", if there isn't any real money left.
These are the times when you can explain about the need to have the money in the bank to pay the credit card bill.
SMART SPENDING PRINCIPLES
If your child wants to buy something, say clothes, help them shop around for the best deal. If you do this there is more likelihood the child will repeat this process on their own.
Start by explaining good and bad spending habits. For example:
• Good is using money to buy something you really need like food.
• Bad is blowing all your money on chocolates or toys.
Use examples that will ring true with your children. Impress on them that the key to good buying is planning what you need before you leave the house. That means doing your homework.
Make a point of comparing the price of a trendy brand name item and one which isn't so cool. Compare the quality and see if it's worth paying the extra.
We've also found a good lesson is comparing an expense to some other good or to the amount of work time needed to pay for it. For example, that monthly mobile phone bill is equal to two movie tickets or working four hours at Maccas.
People do the most damage to their budget from impulse buying. Explain to children that if they are buying a big-ticket item, ring around a few shops or go online first to compare value, even if you have to travel a bit further to get it.
Once at the shop, resist the temptation to purchase other items just because they may be on sale. Explain that in-store demonstrations and advertising are designed to make things look great and essential regardless of their necessity.