Raising MoneySmart Kids and Teens Tips

Transcription

1 David, Libby and AJ Koch discuss their thoughts on raising children to be financially aware. The table below is a brief overview of the content of each video. This will help you select a topic/area to discuss with your family. On the following pages are further suggestions about where you will find that content in the video resources, with space for you to expand on these ideas, and adapt them to suit your own family's circumstances. Money habits Managing money Earning money Spending money Building confidence - Young people will develop money habits from watching you. - Show young people how to research value and a good deal rather than impulse buying. - Sound good financial decisions help you become a competent consumer. - Having goals makes saving easier. - Know the difference between what they really need and what they want. - Young people learn many life skills from a part-time job. - Never too young to start becoming money aware. - Healthy money management skills are as important as a healthy lifestyle. - Where does money come from and how do you get it? - Why you might choose one product over another when shopping. - Create a sense of achievement and good ethics from working to earn your own money. - Develop good habits like donating a little to those less fortunate. - Make simple changes around the home for more family time, or more money to spend on something else. - Real life examples have a big impact. - Giving pocket money helps young people learn the value of earning. - Young people learn by doing jobs at home from a young age. - The difference between getting paid and helping out as a family member. - Setting money goals and budgets. - Developing good financial habits from a young age helps future wellbeing. - Never too young to be smart with money. - There is always pressure on young people to spend. - Show young people that a sale isn't a bargain if they didn't really need it. - Help young people set up and manage a budget. - The additional cost for brand name items could be met by young people; encourage them to think about needs and wants. - Young people learn from watching adult behaviour. - Support what is being taught in the classroom. - Include young people in basic family financial conversations. - Encourage young people to make planned decisions spending and resist impulse buying. - Pay a bit more pocket money to show young people how to budget for their own transport and lunch costs. - Demonstrate the difference between debit and credit cards and how they can impact on savings. - Help young people develop confidence to ask questions. - Explain to young people that if it's too good to be true, it probably is. - Raise young people s awareness of different types of scams. - Explore online tools that help plan, manage and achieve financial goals. - Assist young people to understand mobile phone plans and how to make the best choices.

2 Strategies to discuss Set good examples. Demonstrate to your child that you re willing to put aside personal wants in order to meet the needs of the family and others. Talk to your child about needs versus wants when spending especially when they are asking for something when trying to save for something more special. Do they really need or is it something they can live without in order to keep saving? Remember - real life examples often have the biggest impact on young people's education and personal development. Develop your child's sense of responsibility and family ethics. Set an expectation that certain jobs are done by family members simply because they're contributing as part of a family, not because they will be paid to help out. Making the bed and picking up clothes could be seen as developing good habits for the future as well as contributing to the running of the household. Other jobs such as washing the dishes or putting the bins out could earn pocket money. Your family's strategies Examples I can set as a parent: (Examples: Make coffee for the trip to work instead of buying take away, make a sandwich for lunch instead of purchasing, or put gold coins into a container for a 'rainy day') Pocket money jobs: (Examples: Washing the car, sweeping up outside, washing windows or vacuuming.) Unpaid family jobs: (Examples: Making the bed, putting washing in the laundry, setting the table, emptying the dishwasher)

3 Peer pressure and brand loyalty are relied on by marketing gurus. What is marketing and what do young people need to be aware of to be sure they aren't manipulated? Talk to your child about how things look glossier and bigger and better on television or in catalogues because marketing people work hard to make them look appealing and tempting. Do they really need what they see? Discuss impulse buying and what happens to a budget if people constantly buy things that are outside that budget. Is it really as good as it looks, or is it the idea or the image rather than the value of the product that is being bought? Is something bought at a sale because it's cheap really a bargain if you weren't going to buy it before it went on sale? Talk about financial goals. What do they want to aim for? Start with an easily achievable goal and increase that to something more expensive as they get older. How much should be saved each week for this target? How long will it take to achieve with a range of savings plans? Find online calculators to help your child calculate how much they need to save for in order to get what they want. Consider giving your teen the opportunity to earn more from additional jobs either at home or through paid employment to help with the development of their own personal work ethics. It's good for young people to understand that for adults and households there are many sources of income; however income is a finite resource. How can we avoid impulse buying? (Examples: Walk around the block before purchasing. Wait 24 hours and see if buying it is still really important.) Ways to achieve goals we have set: (Examples: Look at online tools such as the MoneySmart calculators. Offer additional jobs for extra money. Make a goal to save for something small like a game; make the next goal something a little bit larger.) Opportunities to earn more money: (Examples: Make a list of optional jobs and their value. Encourage your child to get a part time job, or ask neighbours or relatives if they have jobs that can be done for fair pay.)

4 Pocket money teaches young people the value of earning. Give your child an allowance and discuss splitting it some to spend, some to save or put away to achieve a small goal, and some to help out others who may be in need. Donating to a worthy cause from an early age helps to develop a child's ethics and sense of community and caring for other people, animals and the world around us. A good starting point could be to spend 40%, save 50%, and set aside10% to put into a collection tin or perhaps an online charity of your child's choice. Growing up brings more responsibility and more complexity. When your child receives their first mobile phone show them how to check data usage; discuss ways to minimise data use; set boundaries on when and where the mobile is used; involve them in setting up a monthly budget for their mobile phone. Splitting money to achieve different goals: (Examples: Discuss savings goals. Set up an online savings account for the goal and watch it grow. Sponsor a child or animal. Encourage family members to donate their time to a cause instead. Set three jars up and pay your child in cash that can easily be separated into the jars to show how it can be split. How mobile plans work: (Examples: Look at resources such as the mobile phone resources on the MoneySmart Teaching website. Go through them with your child before they get their first phone. Look at your last mobile bill together and see how everything is calculated. Decide on rules for when, where and why the first mobile phone can be used.) Shopping around is better than impulse buying. Encourage young people to research online to find what they want and compare prices, options for returning items, etc. but be sure they're also aware of scams and the need for online security, Shopping around and comparing prices and service (Examples: Visit cybersafety websites for information about online security and scams. Learn how to use a search engine efficiently so the kids find it easy to research and compare before buying.)

5 Discuss credit and the difference between debit cards and credit cards. Invisible money often makes debt seem less real. Does spending from a plastic card mean that budgets can be stretched? Today s children don t often see adults spending cash. You buy groceries using a debit or credit card and you get cash out with the receipt. So perhaps your child observes you handing over a card, and receiving cash back from the salesperson. At home you pay your bills and make purchases online. Money is much more easily accessed than it was and is almost invisible. You might want to discuss that you need to pay back borrowed money, you often get charged interest or fees, and how that costs more than saving for what you want ahead of time. Talk about budgets. Explain how your income has to meet your needs and work on a basic household budget with your child. You could explain how much it costs each week to provide food for the family, and as they get older include the utility costs of electricity, gas and water and look at calculations such as how much needs to be put aside each week to cover the bills when they arrive. Over time you could use the utilities to actively engage children in environmental energy saving solutions for the house with the incentive of sharing the dollar savings. But remember not to worry young children about real financial difficulties you may face. That plastic card is the same as money! (Examples: show the slip that comes out of the ATM and how the balance is lower on withdrawal. Open an online account for pocket money and teach young people to track their incoming and outgoing money so they don't overspend.) Involving the family in parts of the household budget (Examples: Create a spreadsheet with the utility bills and show how the prices change with different seasons and more or less power, gas or water usage. Run an experiment to see how much less one quarter can be compared to 12 months earlier if the family concentrates on switching off power, having shorter showers, closing doors and windows, turning equipment off when not being used, etc.)

6 Discuss the value of money. What are items we buy actually worth? Is quality worth paying for? How much does it cost to buy the groceries each week? Are 'brand name' goods better quality items than 'no-name' brand items? How much does it cost to run a house phone, a smart phone and the internet? How do bundles work? How much can you buy with $20 in a supermarket? Are some things cheaper online? Where will you get good service if something goes wrong with an item you purchased online? Is that part of the 'value' that should be considered? Quality and quantity and the effect on a budget: (Examples: Each week aim to buy one or two 'noname' brand items and compare them for quality to work out which items can be bought cheaper and which really need to be the more expensive version. Write out a small grocery list with the family and go shopping together with a calculator to show how quickly things add up and how buying cheaper versions of some items can let you buy more of something else. Look at online purchases and talk about how important it might be to get different items fixed or replaced online.) Suggestion: Set up a spreadsheet to help young people compare their choices between brand and No-brand products, work out their savings and then decide whether the quality of a cheaper item provides the same value. Brand name Cost No-brand Cost $ Saving Buy again?