Money tips for toddlers to teens
Hands up anyone who wants his or her kids to go from piggy bank to plastic cards without passing go?
There are many ways to teach your children healthy savings habits and it's never too late to start.
Tips for toddlers and young children
Start playing money games as soon as your child is old enough to stop swallowing the stuff.
Consider giving pocket money from age 3-5 so that young children can learn to manage their own money.
Break down the cash into small coins and split it into three parts: spending, short term saving and long term bank saving. Some experts suggest a fourth category of donate.
Talk about the money, and hand it over at an hour when the children can't rush out and spend it.
Consider paying your children chores, but beware of them saying "how much" each time.
Teach wise consumerism by having your kids compare prices when you're shopping.
Introduce your kids to money games such as Monopoly, The Game of Life, or Cashflow for Kids.
Once they hit Primary school, children's ability to learn about money grows with leaps and bounds. It's worth explaining the miracle of compound interest to children. A 10-year-old that starts investing $10 a week in an account paying 7.5% will see that money grow to as much as $24,122 (depending on the tax paid) over 20 years. That's a staggering amount.
Getting the penny to drop is different for every child. One young entrepreneur I once met had been given 10 cows as a gift. It was a real financial eye opener for him and he was soon scheming ways to buy 100 of the beasts.
The catalyst for some young people is working part time - even in quite simple jobs such as delivering newspapers. If you can convince them to put away a small portion of that for medium and long term savings, your young person may learn to value the discipline.
Others simply learn by watching their parents and copying sensible financial behaviour.
Tips for teens:
Let teens take control of their own budget for items such as toiletries, clothing and mobile phones.
Talk about wants and needs.
Lead by example. If your children see you frittering money, so will they.
Hold family financial conferences.
Pay extra money for special jobs such as mowing the lawns.
Consider matching teens savings dollar for dollar.
Try not to interfere or bail your teens out.
Charge interest on money lent to children.
Finally, if your child is a financial disaster in early life, keep up the good work and they might see the light later on.
Links:
www.sorted.org.nz
www.practicalmoneyskills.com
www.enzt.co.nz
Diana Clement
Independent Financial Commentator
Issue 9: 26-04-2007