Thanks to Westpac’s commitment to setting up the next generation for success and a brighter financial future, I’m sharing my tips on teaching your kids the value of money and saving. Instilling positive saving habits is such an important skill that can be taught from a young age. If your children think money grows on trees and they have trouble understanding the value of money, then this is the post for you!
OPEN A BANK ACCOUNT
Opening a bank account is a great way to introduce children to the concept of saving and how a bank account works. Take the time to explain to your kids how a bank account will benefit them, how interest rates work and about bank account fees they may be charged. Having a bank account for your child is the first step to setting up positive saving habits and teaching kids the importance of savings.
Kids under 18 can open a Westpac Bump Savings account, which includes a competitive variable interest rate of 2.3% p.a. (1.5% p.a. base rate), and has a savings goal function with the ability to set up to 6 different savings goals within the account. Babies born in 2017 are also eligible to receive a $200 deposit into their Bump Savings account, until May 2018, which is available for withdrawal when they turn 16 (conditions apply).
Sit down with your child and create a savings plan. Talk to your children about making choices about prioritising what to save up for and what to spend their money on. This is a great time to explain the difference between needs and wants. Each of my kids has a clear, see-through money box, so they can watch their savings grow.
TEACH THEM HOW TO BUDGET
It can be as simple as letting your kids help you find weekly specials when doing the groceries. I like to sit down with my children and show them how I budget, from the grocery shopping to working out my bills.
GIVE THEM POCKET MONEY
Pocket money is a great way to teach children the fundamentals of managing their own money along with saving. You can give pocket money each week at $1 per year of age, or you could pay them to do extra chores around the house. They not only learn to manage their own money, but also learn they have to earn money and it’s not just handed to them.
LET THEM HANDLE MONEY
Take your children shopping and show them how they can make better choices at the store, like picking something on sale or better value. Let your child pay for their own item and collect their change so they get the full experience of handling money.
SET SOME GOALS
If you are giving your children pocket money, it’s essential to have a savings plan and goal in place. Discuss and work out how long it will take to hit specific goals you have set out together. There are also fun, educational online tools to help kids learn the value of saving, such as Westpac’s Pay Pig.
I’d love to hear any tips you have, or ways you teach your children the value of money!