16th July 2019 / Prue Fletcher: Teaching Our Kids To Save For the Future

In a world where you can 'tap and go' for coffee and swipe right to find your life partner, how best do we teach our children that money is valuable and cat fishing is real?

Whether it be Apple Pay or AfterPay, our kids very rarely get to see us buying products with physical money like notes and coins these days. Piggy Banks are collecting dusk in the re-gift cupboard next to the paperback Edith Blyton novel they got last Christmas and savings companies like Spriggy are quickly taking their place under the watchful eyes of parents.

I'm a big believer that family values and principles for life are taught in the home. As parents, while we're repeatedly being measured against what our kids are learning from social media or in the schoolyard, we still remain their primary influence when it comes to setting them up for their future.

Here are some ways we can keep the conversation going at home and start developing positive money habits with our kids.

Lead by Example

Did you know that 1 in 3 Australians find talking about finances stressful?* Allowing your kids to embrace basic financial concepts from an early age can go a long way in preparing them for the future. Some good places to start the conversation include:

• ATM: Help your kids understand that the ATM is not simply a place where their parents can take out money when they need it. From a young age, we should teach them that when you work hard at your job, you are given money in exchange for yourservices, and the bank stores your money inside the ATM. This would be the modern analogy of telling them that 'money doesn't grow on trees'.
• Supermarket: Explain the price difference between branded and home-branded products. Why not make a game out of it and teach them how to save money by buying in bulk or doubling-up when items are half price?
• Bills: When paying our gas and electricity bills, discuss why electricity is more expensive in the Summer and gas in the Winter. Teaching them to be more mindful before turning the heater on will also help keep costs down!
• Budgeting: Teaching your children the value of needs versus wants is fundamental to good money management. If they save for something long enough and with the right discipline, they can buy that new PlayStation game, by teaching them to prioritise their wish-list alongside things they actually need will establish a strong foundation for them in later years.

Age-Appropriate Strategies

When deciding how to start, consider the age of your children. While younger kids will likely find collecting coins serves them well, get creative with the older kids as they transition into adolescence.

• Provide incentives, not allowances. Meeting them half way with a bonus or matching their savings dollar-for- dollar if they are working towards a bigger goal not only teaches them that you get paid well when the work is completed to a high standard, but that a good work ethic and positive attitude goes a long way.
• Play family board games. Games like Monopoly not only teaches kids about banking and finance, but also opens up the conversation to real estate and investments opportunities.

Get Rid of the Piggy Bank

In a world of automation and online banking, money is becoming invisible, so it helps to adopt a visual strategy when teaching kids about finances. A simpleway do this is by replacing the piggy bank with a clear jar. Did you know, filling a 500ml bottle with $2 coins can provide you with close to $1000 worth of savings' ?

Most children learn best visually, so by allowing them to watch something build and as they begin to approach their goal will encourage them to work that little bit harder to get there.

Teaching today's generation how to save, spend, borrow, donate and invest will hopefully instil them with the proper tools and solid foundations to realise the great Australian dream of buying their first home one day. And if my girls are anything like me, they'll want to get started straight away!

If you have any great money advice that will help todays children start saving for their future, please drop me a line at prue.fletcher@fletchers.net.au.

I'd love to hear from you!

@prue_fletcher