Learning about the value of money and how to budget and save is one of the most important life skills that your kids will learn from you. The earlier you can teach them about saving versus spending, the better prepared they will be to manage their own money, now and in the future.
Lisa Cartwright, Commonwealth Bank’s, General Manager School Banking, shares her top tips for teaching your kids about money.
- Children want instant gratification and it takes time for them to learn the difference between needs and wants. Helping them with this will help prepare them for making good spending decisions in the future.
- As soon as your child can count confidently, introduce them to the concept of money and how we count coins and notes. Take an active role in explaining how money works. Observation and repetition are two important ways kids learn.
- Consider giving your child pocket money - it’s a good way to teach them about the value of money. You could reward them for jobs they do, giving them responsibility around the house and creating opportunities for them to earn additional money from doing extra tasks.
TIP: When you are paying pocket money, consider giving a combination of notes and coins. This helps familiarise kids with different denominations and can help them learn how to allocate money. Encourage them to divvy portions of their money for both spending and saving.
- Open a savings account for them. Encourage your child to deposit a portion of their pocket money into their account.
- Make a wish list and set goals. If there’s something your child really wants, sit down with them to work out exactly how much it is going to cost, followed by what they need to do to buy it – a savings plan.
TIP: Sometimes it helps to make the savings journey visual for children. For example, tape a picture of their coveted item in their room so they can visualise their goal.
- Set a good example and save money in front of your child. Keep your own piggy bank or deposit money in the bank when you are with your child. By showing them you understand the value of saving, you’ll pass on practical real life lessons to your child.
- Remember that kids need to understand where money comes from. When you withdraw money from an ATM, explain to your child that it is your money coming out of your bank account and how you earned the money. It’s important that they know there isn’t a limitless supply!
- Learning at school. Financial literacy is an important part of our children’s life skills. Talk to your child’s school about how they teach financial literacy in the classroom. A great way is to participate in the Commonwealth Bank School Banking Program.
- Commonwealth Bank’s School Banking program encourages primary school children to learn how to save and mange their money, with children making regular deposits to their account while they are at school. What’s more, participating schools receive commission from School Banking deposits – helping them to raise additional funds for school initiatives.
5 reasons to get your child involved in School Banking
1. Your child will get their very own Youthsaver account and deposit book where they can watch their savings grow.
3. Each time they make a deposit they will get a silver rewards token. Once they reach 10 tokens they can redeem them for one of a range of exclusive Dollarmites merchandise, like money boxes, wallets, watches, bouncy balls and USB’s.
4. There are no withdrawal or account fees on the Youthsaver account.
5. If your child already has a Youthsaver account with us they can start using it to bank at school (provided their school offers school banking).
Find out more about how Commonwealth Bank supports the financial literacy of children: