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




Join the Community.

Get your local news, your way.

Stay Connected

Update your news preferences and get the latest news delivered to your inbox.

FALSE ALARM: Authorities identify mysterious white powder

Police remove a bin containing the suspicious white powder found in a letter to the Clarence Valley Council this morning. Photo Tim Howard / Daily Examiner

Police commend staff members from two councils for professionalism

OUR SAY: The night that matters

Prime Minister Malcolm Turnbull (L) and Treasurer Scott Morrison during Question Time at Parliament House in Canberra on Wednesday, March 16, 2016. (AAP Image/Mick Tsikas) NO ARCHIVING

Budget pivotal in outcome of Federal election

Unions urge Kevin Hogan to stand up

Clarence Valley Community Union members state their case outside Kevin Hogan’s office.

Education, Medicare and penalty rates on the agenda

Latest deals and offers

Clarence Valley Council evacuation

Clarence Valley Council general manager Scott Greensill talks to the four staff kept in isolation after discovering white powder in a mail delivered to the council records room.Photo Tim Howard / Daily Examiner

Fire And Rescue NSW Grafton station officer Col Drayton explains the emergency...

Unions protest against education and Medicare cuts

PROTEST: Stephen Fletcher, Sharryn Usher, Darryl Chaffey and Robert Usher perform a stunt outside Kevin Hogan's Office.

Clarence Valley Community unions representative Sharryn Usher led a protest outside...

The McClymonts announce show at Saraton Theatre

THE McCLYMONTS: Mollie, Sam and Brooke are coming home to play at the Saraton Theatre in August.

Grafton's favourite homegrown trio The McClymonts announce a show at the Saraton...

How a sacked real estate agent made $725k in four months

Agent is now under investigation by the industry watchdog

VIDEO: Art Deco fan pays $835,000 for Imperial Hotel

No Caption

Iconic "Impy" sold at a bargan price to bidder who loves Art Deco.

RBA warns of future apartment oversupply

Toowoomba: Crest Apartments and Burke & Wills, Ruthven Street ( view from Neil Street) Photo Bev Lacey / The Chronicle

RBA says oversupply of apartments poses risk to household finances