Brought to you by the Financial Planning Association of Australia
It’s not easy to talk to kids about money, especially when you don’t feel money savvy yourself. Do you remember the first conversation you ever had about money? I can’t recall how old I was exactly, but I definitely remember my parents sitting me down for a demonstration featuring miniature towers of coins and some apples and oranges from a nearby basket. The more fruit I gained, the fewer shiny coins I had in my possession.
Whatever your experience, there’s every chance that as a kid you developed a better understanding of how money works than kids do today. They’ve been coined the “Invisible-Money Generation” in a report released by the Financial Planning Association rel=”nofollow” (FPA) of Australia.
Share the dream
The Share the Dream report talks about how technologies like online transactions and ‘tap and go’, are creating new challenges when it comes to teaching kids the value of money. It’s not hard to see why. It’s so much easier to attribute value to a stack of gold coins on the kitchen table than a few digits in a banking app, which (at least to my kids) looks more like a pretty calculator.
The truth is the way we talk to kids about money better prepares them for the future. Despite this, 66 percent of parents say they are reluctant to broach the subject with their kids.
As a financial planner and parent, I make a point to have open conversations about money with my daughters intertwined with everyday life. ‘How do we earn it’, ‘how do we maximise what we earn’, ‘how to save for the big things’.
The more they know, the more they will be empowered.
Some tips on how to teach children the value of money
I remember when my girls were around the age of 10, they would ask for a new pair of designer shoes. At that time, they got a weekly allowance of $20 each. The cost of the shoes was $80. Rather than just buy the $80 pair of shoes, or whatever else they had their eye on, I would ask these questions:
1. Do you need this right now?
2. Are you prepared to save your $20 weekly allowance towards the purchase of this, and can you wait 4 weeks?
3. If not, what extra jobs are you prepared to do now to get closer to owning this thing you’ve got your heart set on?
And then I say: ““To have everything you desire in life is achievable, and it all comes down to the decisions you make. How much effort will you invest into achieving the things you want? You are your most valuable asset.”
“To have everything you desire in life is achievable, and it all comes down to the decisions you make.”
Modelling the right kind of behaviour
Having money conversations with your kids can make a positive difference to their financial future. The first step in putting kids on the path to financial literacy is to reflect on our own attitudes toward money.
For example, did gender play a role in how money was managed or spoken about at home? Was money a taboo topic? Perhaps you recall your childhood money conversations as practical and cheerful?
The last thing we want as parents is for our worries to weigh on our kids.
Creating positive money memories for children starts with modelling good behaviour.
Planning for the future can alleviate anxiety. If you find planning tricky, start small and ask for help. Knowledge is power. Surround yourself with professionals in the know.
The Share the Dream report also revealed that “parents who seek or have sought advice from a financial planner in the past were more likely to have regular chats with their kids about money than those who do not (61% compared to 43%).”
Empowering kids towards financial success
Building a positive attitude around work will also help empower kids to have more agency in their own spending.
Start with some pocket money for completing age appropriate household tasks. It’s also a good idea to encourage your kids to look for casual work when they’re old enough.
The Share the Dream report found children with a paid job are more digital money savvy.
Eighty-four percent make online purchases for themselves or their family, versus 56 percent of those without a job. Who knows, they might even be able to teach us a thing or two.
How to Talk Money with Children
Do you find it easy to talk to kids about money?
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