Teaching your kids about money
A new year often involves a vow to adopt a new approach to handling your money.
We’re often told we should give our children pocket money to practice handling finances for the future. But how much, when and why? The reality is that it depends on the child.
How to start depends on your own financial circumstances and the age of your children. As a parent, you’ll obviously want to know what you want or expect them to do with the money.
If it’s for small treats, they can probably manage on a smaller amount and build it from there.
The challenge for many families today, however, is that simply waving your credit card at the check-out scanner and being provided with the goods without question gives the appearance it’s easy. which it is … in the short term.
OECD research reveals a simple wave of your phone or credit card at a store for purchases is so ingrained and easy among today’s “digital natives”, actual money – coins and dollar notes – are almost foreign to them. The concept of content’s true value doesn’t accurately sink in.
That has led to lower levels of financial awareness than previous generations. Following the 2008 GFC – Global Financial Crisis – the financial environment became increasingly more layered and complex. Coupled with our desire to please our impulses in our lives, including access money in an instant, the need for greater financial awareness becomes more crucial than ever to making sound, financial decisions, especially to the younger generations.
Some families pay their children pocket money for doing chores, like mowing the lawns or cleaning the car. The kids get used to working for their money. If they don’t work, they don’t get paid. That can be incentive enough.
Helping your kids to have a “grow” pocket money account can encourage entrepreneurial spirit. For younger kids, it can be helpful to give them physical cash that they can touch and see. The idea of a bank account can be a bit theoretical for the youngest savers. Starting your kids with coins and the occasional note put in glass jars that is easier to see than a piggy bank provides more incentive to continue. It’s a small but telling step to stay disciplined and on track.
Saving money to grow an investment or to have enough on a rainy day is a sign of discipline in an environment where genuine credit is due.
We can help you at NZCU with the KIDS CLUB ACCOUNT, your children can direct credit small amounts from job earnings or make a free transfer of as little as $1 a week from your or their grandparents’ NZCU account.
Your kids will also be part of our Kids Club when they join. They’ll earn 2 % p.a on their savings account and other benefits along the way to becoming a good saver.
Talk to us about starting a Kids Club Account