From the time they’re learning to crawl parents begin teaching their children about right and wrong, personal safety, manners and morals. Over time, children are taught about stranger-danger, healthy eating and personal accountability. Interestingly however, many Australian parents leave out one of the most important survival skills their children will need in the future - how to take care of themselves financially.
Teaching children about how to manage their personal finances from a young age will have a profound impact on their attitude to money in the future. We teach our children about spending money, but making this the only facet of money management they are exposed to is frought with danger. Exposing children to the emphasis of buying can come at the expense of other important money skills that children need to learn – earning, saving and sharing.
Giving children the skills to control their finances is not only beneficial in their financial wellbeing – it also contributes to the forming of their personality and unique attributes. The lessons on self-control, conviction, resourcefulness, contentment and compassion are all valuable in shaping a well-rounded, socially aware and responsible person.
In this age of online banking and plastic, it’s difficult for children to understand the value of these transactions because all they see is you giving a card to a salesperson or tapping a machine and then being handed the goods.
ASIC’s MoneySmart website has teaching resources for teachers (including parents and guardians) to help develop financial skills in young people. Resources include e-books, videos and intercative activities. You can vist their website at moneysmart.gov.au/teaching
While this is a useful initiative, there are some simple things you can do at home to put your child on the right track:
• Let your children watch you do online banking so they can see how much money you have and how it is managed each month to pay for recurring and unexpected living expenses.
• Encourage your children to play ‘shop’ at home.
• Let them help with putting coins in the parking meter or vending machine
• Explain the reasoning behind your budget and how it helps your family save to take holidays or do fun activities.
• You may want your children to earn their pocket money by doing age-appropriate things around the house, like watering the plants, setting the table or packing the dishwasher and then make them save some of the money to create a savings routine from an early age.
For teenage children, you might raise the prospect of setting up a trust in their name through which your child can invest some of their savings in a managed fund or shares. This can be a daunting task for a parent and it may be useful to talk to one of our financial planners about the various ways this can be done.
Talk to your children about money and keep talking to them about it as they grow. The lessons learned will stay with them for life.
To discuss your financial situation, make an appointment with a Bridges financial planner. We have an established alliance with Bridges, to provide our customers with financial advice.
Bridges has been helping Australians with financial advice for 30 years. A Bridges financial planner will develop a plan specifically for you; one that’s tailored to your needs and circumstances to help you achieve your goals.
To make an appointment with a Bridges financial planner, call 1300 361 555 or email email@example.com. The initial consultation is complimentary and obligation free.
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This is general advice only and has been prepared without taking into account your particular objectives, financial situation and needs. Before making an investment decision based on this information, you should assess your own circumstances or consult a financial planner or a registered tax agent.
Examples are illustrative only and are subject to the assumptions and qualifications disclosed.
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