Teach Kids About Money

The other day my 4 year old son accidently broke one of his toy trucks “we’ll have to go buy a new one now, Mummy” he said.

My reply was: “well where am I going to get the money for that?”

His answer: “from that machine in the wall!”

With internet banking, eftpos machines, direct debit and keycards our society is becoming largely cashless so kids don’t really have a concept of spending money. Which is why it is so important to sit back and carefully think about how we can teach kids about money from a young age.

Here are some tips and points to get started:

1. Explain even the most basic concept that spending money only happens after you earn it. It might seem obvious to us adults about the correlation between working and income but it’s not so clear to young kids.
2. Take them shopping and talk about how you select what you put in your trolley. My kids always want camembert but once I showed them the cost of that cheese compared to cheddar, they don’t ask anymore! Show them the concept of something “on special” and how you can save money by comparing the cost of different products.
3. “Comparison shopping” of course extends to larger purchases as well. For older kids involve them in research you might be doing when considering buying a new car, getting car or house insurance or even just a mobile phone!
4. Go on a “money tour” around the house. Kids don’t know that hot water costs more than cold water, or that by turning on the air-con or heat costs money, even leaving the lights on costs money. This exercise will help them understand and hopefully help converse electricity, therefore saving money! You can even get out some bills and show them water, electricity, car, house and contents insurance – how there are many bills and they add up!
5. Be a good role model. You are your kid’s most influential role teachers. When you take out massive loans or ring up a huge credit card debt and don’t save anything, this is what kids grow up believing is normal.
6. Start an allowance – getting kids involved in earning money, saving and spending will give them a solid financial footing from a young age.
7. Tell kids stories about your personal money experiences. The first time you saved all your money and what you bought. The first time you wasted money and how awful that felt.
8. Explain the difference between need, want and wish. This I find is particularly important as our kids are so bombarded with products from TV commercials or the latest toys and gadgets their friends have.
9. Explain how internet banking, keycards and eftpos machines work – that even though you aren’t handing over physical money it still comes out of your bank account.
10. Open up a Scoot’s super saver with bcu which is a bonus interest savings account for kids under 13. I have one for my kids and it my oldest son is well on the way saving for his Ipad mini!

You can find out more about Scoot’s super savers by clicking here: https://www.coffsforkids.com/introducing-scoot/.