Spending money is easy – just tap your card or swipe right and before you know it you’ll have your hands on the latest and greatest. Card-less cash has never been easier, but there’s a downside to this easy swiping culture and it’s reared its head in the ugly form of debt.
Our kids are growing up in a world designed to keep them wanting and buying. In a game of keeping up with the Kardashians, there’s a constant need to consume and acquire more, which can be dangerous if they’ve never been taught about money; how to spend it, save it, invest it, and not rack up a house full of debt.
Here are five ways to turn your little people into big savers
Small Change, Big Lessons
Pocket money is a great way to help teach your mini-money handlers the ABC’s of finances at an early age. Knowing the value of money helps prevent them taking it for granted. There’s a big difference between saving up to buy Barbie’s fun house and expecting it to arrive on their doorstep. To earn their keep, start your petite people off with pint-sized tasks such as making their bed or feeding the cat. As they get older, add new responsibilities so they’re making a real contribution to the household.
Banking on a Bigger Picture
Once your child is earning pocket money, it’s important to teach them not to spend every cent they’re given. Start by setting up a children’s savings account. By keeping their hard earned dollars out of reach, they can watch their savings grow from a distance and learn about the joys of compound interest. A more tangible tip is to set up three jars labelled spend, save and donate and let your child divide their earnings equally. This scratches the instant gratification itch while letting physically watch their savings grow. It also demonstrates the power of giving to those in need.
Jobs are Priceless
Once they’re old enough, it’s important for your child to start earning money outside of the house. Encourage them to seek out opportunities that let them see the bigger picture and reap the rewards of their hard work. If your kid’s got an entrepreneurial edge, encourage them to be their own ‘boss’ by finding a niche in the neighbourhood such as Pokemon themed hedge topiary. Starting small will teach them that they have to work their way up and who knows you might have a mailroom mogul on your hands.
Splitting the Bill
Cast your mind back to when you first moved out of home; you were probably shocked at how much everything cost. From ridiculous rent money to groceries and relentless bills. To start preparing your child for good money management, involve them in the decision-making by explaining the ins and outs of your everyday expenses. When you’re wandering the aisles of your local supermarket, take the time to explain that the difference between 2-ply and 3-ply is an extra hour’s work.
Eyes on the Prize
Help your child build realistic long-term savings goals. If you can see they’re putting in the hard yards, consider matching them dollar for dollar on a big ticket item. You can also teach them that a little willpower goes a long way and that small sacrifices add up to big rewards. It all boils down to making sure your kids understand that money doesn’t grow on trees. By the time they’re old enough to apply for their own credit cards you’ll have given them a strong foundation for making smart financial decisions.
At Neue Black, helping the next generation build a strong and secure future is what we do. In the wise words of Benjamin Franklin, “It is easier to prevent bad habits than to break them” so start early and set a solid financial example. Let us show you that life gets better by change, not by chance.