Teaching Kids About Money: The Back-to-School Edition
Here at The Money Collective, we’re passionate about uplifting financial wellbeing early by having open, honest conversations with our kids about money – and encouraging others to do the same.
The more we share with the younger people in our lives about our own money journeys, the more confident and informed they’ll be – and the less taboo money will feel.
Our co-founder Darlene Neu was interviewed in Issue 17 of Commbank’s magazine The Brighter Side of Banking, talking about how to reset your kids’ budgets after the expense of the school holidays.
Here are her words of wisdom.
Involve them in creating a budget
We’re all familiar with the school-holiday budget blowout, but how do we help our kids adjust back to normal life again once term-time starts?
A helpful approach can be working together to map out their expenses – hobbies, subscriptions and after-school treats – to give them a real-life look at how your family makes financial decisions.
As Darlene says, “Showing kids what you do with money helps them understand where it goes and how to plan.”
Establish realistic goals
Help your kids set clear, achievable savings goals for things they want – and make sure the timelines are short enough to be achievable.
You might get the urge to chip in towards the end, but don’t overdo it. “The act of saving and achieving builds self-esteem,” Darlene says.
“This helps kids feel proud of themselves and reinforces the positive habits they’re learning.”
Share real information with them
If you aren’t used to talking about money in your family, now’s a great time to start. Weave it into casual conversations at the dinner table – and don’t be afraid to dive into the details.
“The best thing we can do is be honest about how we manage a budget, how much we earn, how much things cost at the supermarket,” Darlene adds.
“The more real we can be, without being scary or overly emotional, the better. But don’t make it boring or clinical. Have a warm, open conversation about the ups and downs of money.”
Let them make mistakes
Learning healthy money habits often comes from a trial-and-error approach – especially when you’re first starting out. That’s why when it comes to pocket money, it’s important to give your kids practice making decisions about their own ‘income’.
“If kids save, they learn the reward of being able to buy something bigger later. If they spend it all, they learn what it means not to have money for something else,” Darlene advises.
“Don’t top them up – that’s how they learn the value of saving. The key is for parents to set boundaries and stick to them.”
Want to read the full piece? Head to page 20 of Issue #17.
Blog article by:
MEL PEARCE
Financial Wellbeing Consultant and Co-Founder
The Money Collective