Parents across the nation are breathing a sigh of relief now that kids are settled into the school term.
It’s pleasant to think you can sit back and relax, leaving the education up to the schooling system but there are many areas where a school’s education is lacking.
Let’s delve into a key one of these - financial management.
Money makes the world go ‘round, so it’s almost inconceivable that anyone can go through life without being exposed to its influence.
Even from an early age, kids are bombarded with advertising trying to get them to spend it.
So how do we raise children who understand the value of money and know how to get ahead? And when should you start?
From when they begin preschool, you can introduce the concept of money to your children.
The idea that money is required to buy things is the first step.
When you’re out shopping, let them hand over cash at the checkout, showing them that you have to give money in order to buy things.
Introduce them to the different notes and coins, though don’t get hung up on their values at this stage.
Next, teach them where money comes from.
Talk about your work and explain to them that you receive money from your employer or business for the work you do.
You can begin to introduce pocket money and have the child start to make their own purchases. This will help them understand how far money goes.
As they start school, you start talking about saving money for big purchases.
Start a bank account, or even just track it yourself on a spreadsheet, and let them see how putting money aside builds up over time.
Teach them about needs vs wants, and how spending money on one thing means you don’t have money for something else.
Don’t expect them to make smart decisions straight away, but over time they’ll come around.
Once they have a good grasp on numbers, they can start to shop around. Get them to compare prices and learn that something’s value can vary.
This is also a great time to talk about shopping online and being security conscious as you do. Learning how to identify a scam is a valuable skill.
High school age
It’s time to start budgeting. Your child might have started part-time work and be earning money, and no doubt they’re spending it at an alarming rate.
Sit down with them and run through a simple budget, thinking about all their expenses and discussing each one.
Don’t try and force them to stop spending, simply highlight where they could be cutting unnecessary costs.
Mobile phone bills are also a great talking point. Helping them to understand all the information that’s contained within, such as how to check data usage and extra fees, will be a great tool for the future.
With a budget completed, the focus can move onto long-term savings.
Think about large purchases that your child might be interested in, such as a new phone or a car, and begin to plan out how they can achieve these goals.
Show how varying the amount you save alters how quickly you reach that goal.
Letting them help plan a holiday is another great way to give them exposure to budgeting and goal setting.
There are many ways to introduce children to financial management, but it’s important that you start talking to them about it early.
Don’t rely on the school system to teach them the value of money or how to control their financial future.
Olivia Maragna is the co-founder of Aspire Retire Financial Services and is an independent and respected financial expert. Olivia’s advice is general in nature and readers should seek their own professional advice before making any financial decisions.