For The Parents

Five ways to teach kids the value of money

Some kids think money grows on trees and others just think Mum and Dad put their hands in their wallets/purses and magically that thing you wanted in the store is yours, purchased with this never-ending supply of colourful paper or more likely with the swipe of a card!  A few kids will understand how money is used to pay for things like food, clothing and electricity but not so many will truly understand the value of money.

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When it comes to asking for money, most kids find it pretty easy to ask Mum and Dad - they want to go to the movies with their bestie in the weekend, pick up some Macca's on the way and finish it all off with an ice-cream from the dairy on the way home. It can sometimes feel like they almost expect it to be handed over, no questions asked and certainly, no effort put in to earn it.

What would happen if next time the kids come looking for money, you suggest they actually put some of their own time and effort into earning the amount they desire? Just like you put the time and effort into your job to earn your money so you can afford to do and pay for things - if our kids did the same, do you think they would value it more? They would hopefully feel like they have earnt and deserve it for all the sweat and tears put into the task at hand!

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To help educate our children about the value of money and what it does, here are some ideas and conversation starters you might like to try with your kids.  There are lots of teachable moments happening around our kids all the time that we can take advantage of. Even if you have young kids say under nine, remember they are noticing so much of what you do when handling and spending money so they are never too young to learn!

Five Ideas to try...

1. Get your kids handling real money - help them to easily identify a twenty cent coin vs one dollar and group coins/notes into piles from lowest value to highest, or smallest to largest size coins.

2. Play supermarket shops with your kids using real money - get them to price items of food and then practice counting out coins and notes as you pay for things. What's important here is to make sure kids understand that in order to get things like food, toys or clothing, you have to give the shop money first.

3. When buying something in a shop, before paying ask your child how much they think the item is worth.

4. Take your kids to a shop and get them to spend $5 they have earnt - let them choose how they want to spend it. If they have had their eye on something for a while its a great way for them to learn if they have enough money to buy it or do they need to earn more to be able to afford it.  Will they make the choice to wait and save more or just spend the lot anyway?

5. Let the kids help you plan the next grocery shopping list - can they tell you what they think are 'needs' and 'wants'? Take them to the supermarket and ask them which of these items do you 'need' to make you healthy; milk or a packet of chocolate biscuits?  How many times do you find yourself agreeing or disagreeing with their choices?

There is no one silver bullet when it comes to teaching our kids about money and what it does but starting to understand its value from a young age means kids will have a great head start toward building and living a smarter financial future.