3 different things you can do to teach your kids about money.

Westpac
Thanks to our brand partner, Westpac

 

My son thought the ATM was a magical money machine that everyone had equal access to. As far as he knew, you went to the shops, got money out of the money machine, and then bought whatever it was you needed.

It was so cute, almost as cute as when my little brother thought babies were made when “an egg inside a lady cracks and comes through as a baby when she wants one”. I had to tell my little brother the cold, hard, factual truth.

And I told my son the truth as well, even though he was only four at the time. We have to work for our money.

He seemed to understand.

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I explained that Mum and Dad had jobs and for doing those jobs our workplaces put money in the magical money machine for us. Not everyone earns the same, it depends on how hard we work.

Life lesson: The harder you work, the more money you will end up with. 

I thought it was a pretty good parenting moment, as parenting moments go.

Now all my children are older and have more of an understanding of how money works. All of them are school-age and at this point I’ve come to realise investing in their future is very important.

Westpac spokesperson Jenny Melhuish has six-year-old twin girls and she tells me it’s all about balance.

“I think it’s really important that kids understand where money comes from and how you make it. And I think having those conversations with children at a really early age is important.”

She says there are 3 key ways to invest in your children’s futures:

1. Teach them about money.

You can start teaching children about money from a young age by introducing any system of work that equals a reward and when they are old enough, you turn that reward into money. Just a little bit at first, and then more as they get older and show they can be responsible.

A fun day out with the kids is a perfect opportunity to have conversations about money. Image: Supplied.

“What you can do is make them really aware of the cost of things," Jenny says.

This includes teaching them what they may need to do to earn money, such as washing the car or taking out the garbage, then demonstrating how much of that money they will use up by purchasing the item they want.

Westpac's Financial Futures Report found that financial education empowers young people to make good financial choices. "Financial education can provide the awareness, knowledge and skills to empower young people to take charge and make sound financial decisions," Jenny adds.

2. Invest in opportunities and education.

It's never a good idea to give your children too much, so if you want to shower them with something, shower them with the best education you can afford to give them and as many opportunities as you can. That way hopefully they find something they enjoy doing. Working hard at a job you love is way more fun than ending up in a job you don't enjoy.

Your children will also learn that the right education can open up a whole new world to them. One thing I want all of my children to know is that you never stop learning. There's always more to know.

3. Set up an account and a long-term savings plan.

I opened up bank accounts for each of my children around the time of their baptisms, because coming from an Italian family, they were given a lot of money. All of that went into their accounts and now when they are given money as gifts I have taught them to put some into their account, and then they can spend some.

“Something that we like to talk to our children about is spend, save and share," Jenny says. “One thing that my parents didn’t do for me that we do for our children is we opened up a savings account literally in the first six months that they were born and both of us put in $20 each a week, so that when they finish school they will have a nice nest egg.”

And be sure to involve your kids in the process, so they understand where the money is going, and how it can grow over time.

Westpac's newly launched Bump savings account is a great way to get started, with every Australian baby born in 2017 eligible for $200 into the account.

How did your parents teach you about money?

This content was created with thanks to our brand partner Westpac.

Don't forget to subscribe to Mamamia's brand new podcast Hello, Bump with Rebecca Judd and Monique Bowley.



Westpac was the first bank with a business unit exclusively dedicated to supporting women and girls. In its 200th year, Westpac is supporting families by offering every baby born in 2017 $200 in a Bump Savings account which they can withdraw when they turn 16, if their parent or guardian opens the account in their name between 8 April 2017 and 31 May 2018. Conditions apply. Click here to find out more about how Westpac can help instil positive financial and savings habits from an early age.

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