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It’s never too early to start teaching kids about money. To celebrate Money Month, we asked some of our accountants across the country what they’ve been teaching their children. This is part two of a two-part series…
Time to read: 6 mins
Michelle Valler – Business Advisory Services director – Hawke’s Bay
I see teaching financial literacy to my five and nine-year-olds as essential to their future success. They are still young, so we keep it fun and hands-on. They earn money through doing jobs at home, then split it between spending and saving. We play “shops”, using toy money to buy and sell items, which helps them understand basic money concepts.
We also enjoy playing Monopoly, which introduces them to buying properties, paying rent and managing money in an engaging way. At the supermarket, I involve them in finding specials and comparing prices to show them real-life budgeting.
I explain that we work to earn money for things we need and want, and that we can’t always buy everything we desire. We also talk about giving back by donating to charities or causes that feel important to us.
My aim is for them to develop a positive, responsible attitude toward finances and enjoy the benefits of financial well-being.
Natalie Bennett Business Advisory Services client manager – Baker Tilly Staples Rodway Tauranga
We've been guiding our daughters (aged four, 11 and 14) in prioritising their needs over their wants when managing their pocket money. Our goal is for them to make thoughtful spending decisions while understanding the value of money and recognising that it is a finite resource.
When we visit the mall, the girls often express an immediate desire for an item. We've adopted a practice of stepping away from the store for a while, taking a moment to sit down, and exploring other shops. If their interest in the item persists after one to two hours, we then discuss the cost-benefit aspect to determine if the purchase is truly worthwhile.
Our girls are now more discerning about their spending. They frequently compare prices and are more inclined to dismiss items that don't offer good value. This approach has taught them that if an item isn’t a bargain, it may not be worth purchasing.
Nicola Hankinson – National Technical director – Baker Tilly Staples Rodway
One of the key lessons we have been trying to teach our girls (ages 14 and 16) is the importance of making trade-off decisions (i.e. you have to make hard decisions about where to spend your money. If you buy this, you can’t buy that, or you will have to wait a bit longer/do a bit more work to be able to afford it).
We give both our girls a set amount per month in return for cooking dinner one night a week and doing a chore (i.e. recycling or putting out the green waste). What they do with that money is up to them. One of our girls has accumulated it and now has a decent nest egg. The other one is our “spender” and is constantly waiting for the next monthly payment. It really makes me realise that everyone has their own “money personality” and inbuilt spending habits.
Carolyn Betts – Business Advisory Services manager – Baker Tilly Staples Rodway Waikato
My children are aged 11 and nine. I have tried to teach them from a young age something that my parents used to say to me – that money doesn’t grow on trees! I have had mixed results with the following strategies:
Kylie Hollard – Business Advisory Services and Specialist Services director – Baker Tilly Staples Rodway Taranaki
My kids are 16, 19 and 20 and they learned pretty quickly that you need money to buy things you want. The three-jar concept was a great start when they got their first coins or notes – splitting it into spending, saving and sharing
Even these days, it is important to teach kids about physical money so they can see and understand currency. They are mostly exposed to items being purchased by EFTPOS cards.
When they were old enough, we gave our kids the ability to access their bank account online so that they could see how much they had spent or saved.
When they got their first part-time jobs, we let them spend their first pay on whatever they wanted and then encouraged them to save a percentage of their pay. We set them up with lots of bank accounts so they could move money around for different items they were saving for.
We discussed the interest they earned on their savings and once they had bigger sums, we talked to them about putting it into term deposits to earn even more interest (which also restricted them from spending the money). It is really important to discuss Eftpos card security and keeping PIN numbers and online bank account log-ons private and secure.
In between setting up accounts and saving, we discussed shopping around, not buying the first thing you see, waiting for items to be on special, researching what you are buying and talking to others.
When they needed to borrow money, they were already good at saving and allocating funds for different costs but needed to understand the cost of borrowing (interest) and how this could be reduced by paying back loans sooner. The next lesson was then on budgeting…
DISCLAIMER No liability is assumed by Baker Tilly Staples Rodway for any losses suffered by any person relying directly or indirectly upon any article within this website. It is recommended that you consult your advisor before acting on this information.
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