If you want your kids to develop good money habits for the rest of their lives, then it is crucial to start early. The fact is - children learn their attitudes towards money from those closest to them, mostly at home but also at school. As a parent you can set them on the right path by encouraging and practising savings at home.
The Importance of Pocket Money
Without doubt the most important step to teaching your children sound financial habits is giving them pocket money on a regular basis. This is confirmed in a recent study that suggests that kids who receive pocket money become better money managers later in life.
The actual amount of money provided as pocket money is not so important, but the sense of responsibility and independence you give to your kids when you trust them to manage their own money is priceless in value. It helps to develop their self-discipline as future consumers, as well as their ability to plan future purchases and budgeting.
On this point of budgeting, a useful little tip to teach kids this skill is to have them print or cut-out of the newspaper the things they want to buy. Now you can help them organise a savings plan to put enough money aside to afford this gift.
You can help separate short-term goals such as a book or a new video game, from long-term such as a new gaming console. Not only will this teach them the value of saving and budgeting, but they will experience first-hand the rewards that can be gained by properly managing their money.
But it is also important that they earn their pocket money. This can be as simple as rewarding them for mowing the lawn, washing the car, cleaning their room, hanging up their clothes, and other household related chores.
What Tools Do Your Kids Need to Develop Good Financial Skills?
In our modern economy, a savings account is a must-have. Holiday Coast Credit Union can help you setup an easy to use savings account for your kids, so that they can save their money in a safe, convenient manner.
One of the most convenient features to having a separate savings account for your kids is that you can setup an automatic system that deposits pocket money from your account directly to their account. Another great feature is that your child’s account can be linked to your account for easy access when using internet banking.
Finally, if you feel your family would benefit from some professional guidance with respect to financial planning, our alliance partner for Financial Planning, Bridges Financial Planning can help. This is particularly important if you want your kids to save money for larger future investments, such as a future car or a deposit for their first home.
Click here to contact us for a free initial consultation, or call us on 1300 365 724 to make an appointment.
This article provides general information only and should not be relied upon as financial product advice.