If you have seen any of our recent videos and articles, you would have noticed that we have been stressing the importance of educating your kids about financial literacy concepts. This seems like it could be a tough job, but it really doesn’t have to be. It can start as simply as having a conversation.
The key to teaching your kids about financial literacy is being able to express the uses and value of money. Parents should be educating their children about the idea of earning money from working, saving money for a goal, and giving money away to charity. By doing so, they will be setting their kids up with a positive relationship with money, which will greatly benefit them in the future.
We asked you, our community, how you’ve introduced your kids to financial literacy concepts and money decisions and we were overwhelmed with the responses. Here are our top 5 ways to get your kids involved in money decisions:
1. Planning Their Pocket Money
Giving children a weekly allowance is a common practice, but it’s more than just handing out cash. Encourage your kids to plan how they’ll use their pocket money. Discussing saving strategies helps them grasp the concept of saving, budgeting and planning ahead.
For instance, if you give your kid $5 a week in pocket money, a simple calculation can show them that if they save for a year they will have a total of $260! This will get them thinking about what more they could be doing with their pocket money if they saved it instead of spending it.
2. Let them sidekick in searching for deals
Involve your kids in purchasing decisions by making them your sidekick when searching for deals. Whether it’s comparing prices at the grocery store, scouting for discounts online, or booking a holiday, explain the importance of smart shopping.
Emphasise how saving money on one item can free up funds for other purposes, like family outings or special treats. For example, because you saved money on a new TV by waiting for sales, you can afford to stay an extra night on the family holiday!
3. Family budget
Bring your children into the budgeting process by discussing household finances openly. Show them how you allocate money for various expenses such as bills, groceries, and savings. This transparency not only educates them about budgeting, but also helps them appreciate the costs associated with running a household.
4. Recycling for rewards
Teach your kids about the value of recycling by linking it to financial incentives. Many recycling programs offer cash refunds or donations to charity for returned bottles and cans. Set a savings target with your children and discuss strategies to achieve it through recycling efforts. This not only promotes environmental awareness but also reinforces the importance of setting and working towards financial goals.
5. Planning an event
Engage your kids in the planning of their next birthday party, and involve them in budgeting decisions. Present them with a budget and discuss the different party options with their associated costs and trade-offs. This encourages them to prioritise what’s most important to them within the budget constraints, fostering decision-making skills and financial awareness.
Incorporating these practices into your family’s routine can empower your children to make informed financial decisions from a young age. By teaching them about the value of money and how it can be managed wisely, you’re laying the groundwork for a financially literate and responsible future generation.
If you want to start introducing financial literacy ideas with your children, download our booklet – The Use And Uses Of Money. Remember, the lessons learned today can have a lasting impact on their financial well-being tomorrow.
