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Money Skills for Kids - Primary School

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Invest in yourself for the best return on investment

Schools don’t tend to teach kids much about money other than recognising currencies and learning how to add and subtract using money transactions as examples. But what kids need is financial skills early on to empower them to make sensible decisions regarding money. Skills that will last them a lifetime.

The cost of living will always fluctuate. Our grandparents during the Depression had a very different experience of spending saving and compared with the Baby Boomers generation, and different again with teenagers and young adults of today’s world. So while living costs may rise and fall, as we’ve seen with housing prices and the cost of a latte, one thing will never change, the fact that knowing how to save (and how to spend what you save responsibly) is an invaluable life skill. 

Over the next two weeks we’ll explore some simple ways to teach kids how to manage their money and understand budgeting from a young age. This week we’ll look at tips and tricks for primary school aged kids. It’s never too late to discuss spending and saving with young children, as they learn habits from a young age. The earlier you can instill in them mindful money management, the better.

Shopping for Groceries: 

Take your kids shopping for a small food shop with a set budget and get them familiar with the value of different notes and coins. With the goal to stay within budget take the time to show your kids how you decide what to buy when out shopping. Show them how brands might differ in price as well as volume. Discuss what is better value and perhaps also discuss why you prefer one brand over the other, even if it isn’t always the cheapest option. Let them help you work out what you can afford by counting out the money you have in your wallet and adding up the cost of what you have in your basket.

Start Saving:

If your child doesn’t have their own savings account and they’re already at school, now is the time to open one for them. Ideally kids should have an account early on to help them understand the value of saving and begin to build a bank balance from an early age. Endeavour Mutual Bank has an account especially for kids called the Young Saver Account which is for kids aged 0-17. The ‘kids only’ account offers a very competitive interest rate, access to financial education through fun sheets, competitions and promotions and is fee free. Ideally regular savings patterns should be established during Primary school years. Help your child to reach savings goals (perhaps they want an expensive toy) by explaining how regularly saving small amounts will eventually add up to a larger amount, helping them to eventually reach their savings goal.

Understanding Cashless Transactions: 

Many children don’t realise shopping online, downloading movies, games and apps often cost money. They see their parents accessing content or making a purchase online, but as there is no exchange of cash, it can be hard for kids to equate this as ‘spending’. Help your child to understand by downloading a film with them, showing them how much it will cost on the screen and then explain the money will be taken from your account using a credit card or a debit account. When your monthly account statement is ready for download or arrives in the mail show them so they can see the deduction from your account.

Pocket Money as a Learning Tool: 

If your child receives pocket money, discuss the pros and cons of putting aside some of their pocket money into a savings account over their money box. Discuss long term savings goals (such as a big purchase they will need to save for over several months) and short term savings goals, such as something smaller which might only need a couple of week’s worth of pocket money to purchase. Pocket money can be a wonderful way to encourage children to learn about how money can be earned (say giving them $5 at the end of the week if they made their bed each day of the week). Try dividing pocket money into ‘money to be saved’ and ‘money to be spent’ to help them understand the difference and watch how the two balances differ over time. Allow them to see the progress of savings in their account by showing them their bank statement when it arrives in the post.

Understanding Value for Money

When out and about, perhaps while on holidays or on a day trip somewhere, give your child $10 or $20 to spend during the day. Tell them they get to decide what to spend their money on (within reason) so they can learn to determine what is good value. If they spend it all in one go and want something later on in the day, it’s a valuable lesson in not spending everything all at once. Next time they might be a bit more careful with how they decide to spend their own cash. Help them work out what they can afford and what they can’t but let them make the final decision about how to spend their money.

Teaching our kids how to save and understand spending when they are young will not only help them to begin a healthy and respectful relationship with money, but may also be less likely to rely on their parents when they are older, so win win for everyone!  

Alison Gallagher is a freelance writer, resourcefulness expert and entrepreneur. She has been featured in various publications including Stellar Magazine, Australian Health and Fitness Magazine, and Cleo Magazine. Alison is particularly passionate about sharing practical tips on how to live simply, sustainably and seasonally.