In a world where kids want it all, right now, it can be difficult to teach them the value of money.
From talking about quality over quantity to nutting out superannuation, finance expert Vanessa Stoykov reveals how to get your kids interested in their monetary future – not just spending it.
Give them a point of interest
If your children’s eyes start glazing over the moment you mention money, Vanessa suggests finding something they love and putting a cost on it.
“Get them to think about what they want, then put a price tag on it and help them work out a strategy to get it,” she explains. “It's about giving them an awareness of money and understanding the value in things.”
Vanessa provides a very simple example: “When my kids were young, we all wanted to go to Disneyland. We set up a glass jar to fill with spare money and we’d often talk about the trade-offs we’d make so we could fill the jar faster. Seeing the money stack up, gave everyone a sense we were sacrificing some spending for something bigger."
Talk about superannuation
When your kids are in their teens and getting their first job, Vanessa stresses the importance of bringing up the topic of superannuation.
“Teach them to keep an eye on their payslips and take note of the superannuation. Explain how it all works – most importantly compound interest,” she says. “So, $1 at 10 per cent interest becomes $1.10 etc. how things grow by compounding is very powerful so giving them an understanding of this is vital.”
Making your kids realise that investing in their superannuation now is as important as how much money is in their bank account, will stand them in good stead for when they get older.
Old school saving
Although piggy banks might be a thing of the past, Vanessa believes there’s still great power in having a traditional money box.
“My kids all have money boxes and they count it every week,” she reveals. “They feel a sense of accomplishment when they see how much they’ve saved.”
In terms of instilling a positive attitude in children around saving, Vanessa says that praise and encouragement work much better than focusing on any of the negative aspects.
“Give them kudos for saving what they can, and avoid berating them if they don’t save anything for one week,” she says. “It's about pointing out that money gives you choices and if you don't have money, you don't have any choice.”
Also, make the topic of money an open one.
“Talk about money over the dinner table and also discuss goals and how you will get there as a family,” Vanessa suggests.
Quality over quantity
Have you ever snapped up a bargain only to find you’ve had to replace that item not too far down the track?
Vanessa recommends teaching your kids to buy better quality items so you’re not wasting money replacing items over and over.
“Rather than 20 $10 t-shirts, it’s better to buy one $100 t-shirt that will last you a few years,” she explains. “It’s not about missing out, it’s about setting financial goals to acquire them.”