Money

Smart money habits for kids

Paul Clitheroe
Paul Clitheroe

IT'S easy to think your money habits are no one's business but your own. However when you have kids, nothing could be further from the truth.

Children, and especially teenagers, pick up a great deal from their parents' attitudes to money, and the message we send our kids about the way we handle our personal finances can stick with them for life.

In today's complex world, teenagers can be called on to make quite sophisticated financial decisions like selecting a mobile phone plan or comparing shopping deals offered online. That makes having a good understanding of the basics of money management just as important for children as reading, writing and maths.

Many financial institutions are making a worthwhile contribution, providing school and community-based programs aimed at helping kids develop key money skills.

Research group Canstar for instance, recently named the Commonwealth Bank as the winner of its Youth Banking and Education Award. Hume Building Society picked up the equivalent gong among the mutual banks, credit unions and building societies.

However it's mums and dads who play the pivotal role in helping their children develop sensible attitudes to money, and one of the best lessons kids can learn is the value of regular saving.

Getting children into the habit of setting aside a set amount of cash each week, fortnight or month can establish a pattern that could last into adulthood. Opening a savings account for your child provides practical experience in saving, with the added plus that interest can help their nest egg grow.

Primary age children are unlikely to need a transaction account, so look for a savings account that charges no fees and offers a decent rate of interest. Watch out for any conditions that may be imposed for your child to earn the top rate.

Secondary school students are likely to need a more functional transaction account especially if they have a part time job. Parents can use this as an opportunity to explain how bank fees can be charged, and discuss steps your child can take to minimise the cost.

Along with an everyday account, it's a good idea for high school kids to have a savings account. The two can be linked so that only a small amount of cash is held in the everyday account while the remainder of their savings continues to earn reasonable interest.

Parents can also help children establish saving goals. Even primary aged kids can follow a simple budget that shows how much they need to save each week to reach a particular target.

The key is to get children thinking about their money, and how they put it to work to their advantage.

If you're looking for inspiration, ask your school for age appropriate material they may have on financial literacy, or check out the 'Teaching your kids about Money' section on the government's Money Smart website www.moneysmart.gov.au

Paul Clitheroe is a founding director of financial planning firm ipac, chairman of the Australian Government Financial Literacy Board and chief commentator for Money magazine. Visit www.paulsmoney.com.au for more information.

Topics:  children, money, opinion, paul clitheroe



GALLERY: Keating crowned Mr Jacaranda

Mr Jacaranda, Tyson Keating charmed the ladies on Friday night with his fantastic dance moves and his tight, white tennis outfit.

Mr Jacaranda a great success

Is your barbecue safe for footy finals weekend

Better safe than sorry when you fire up the barbie this weekend

Author keeps Red Rock story alive

FOND MEMORIES: Red Rock resident and author of new book, The Village That Said No to Town Water, Graham Searl, flicks through the publication.

Book launch at Red Rock today

Local Partners

Lady Gaga confirms Super Bowl show

Lady Gaga

Lady Gaga to perform in coveted spot

Girls actors give emotional tributes to hit show

Actor Allison Williams

Actors farewell smash hit HBO show Girls after six seasons

Janet Jackson's pregnancy is 'best thing'

Janet Jackson

Janet Jackson can't wait to become a mum

Jay Z signs two-year movie and TV deal

Rapper Jay Z

Rapper Jay Z has signed a television and movie deal

Nowhere to Hyde: Matt Nable is Australia's man in demand

Matt Nable stars as Detective Gary Hyde in the TV series Hyde & Seek.

NABLE returns to the small screen amidst busy film work.

Marvel's Luke Cage S1E7: Manifest review

Mike Colter in a scene from the TV series Marvel's Luke Cage. Supplied by Netflix.

*WARNING: spoilers if you haven't seen Marvel's Luke Cage*

Beach-side real estate starts at $85k on Fraser Coast

HERVEY BAY REAL ESTATE: You can buy this townhouse in Scarness for under $300k.

Live your beach-living dream locally.

Clarence Valley property prices go through the roof

Buyers are hungry to sink their teeth into the Clarence Valley

UPDATE: Former rodeo champ's sale rained out, now back on

Larkhill local Ken Consiglio is having an auction of most of the things on his property.

'People kept showing up and we had to turn them away'

Couple build their own 'tiny house' for $45k

Holly Bowen and Oli Bucher built their "tiny house" themselves, only hiring a plumber and an electrician. Photo/supplied

The house, which is built on a trailer and can be towed.

Sunshine Beach property breaks real estate record

The property overlooks Sunshine Beach, as the backyard lawn meets the sand.

Sunshine Beach mansion sale smashes real estate record

NEW HOME: Agents to the rescue for family of nine

RELIEF: Tanya Cone (middle) with her kids and McKimm's Real Estate property managers Regan Firth and Nadine Greenhalgh who helped find her family a home.

DEX article prompts property managers to help family find new home