When my oldest child was in kindergarten, one of her friend’s older brother convinced her to swap her two-dollar coin for his (larger, cooler) 50-cent piece. She remembered thinking, “Hang on, one of these is gold and one is silver”. But she was convinced that he was doing her a favour. Needless to say, that lunchtime my oldest child was a little hungrier than usual.
No parent wants their child being swindled like that at school, so it’s important we teach our kids about the value of money.
Which begs the question, is there an ideal age to introduce your children to money and what’s the best way to do it? According to ASIC Commissioner Peter Kell, the answer is the younger the better. “The key to effective financial literacy is to start young. We need to engage students and their families on a practical and accessible level.”
One of the most practical ways to engage your kids with money is during your weekly shop.
Below are some handy ways to combine the lessons I’ve learnt in the financial industry, with the lessons I’ve learnt as a mum.
1.What do you think we need? (The shopping list)
This is a bit of a loaded question. Most parents spend the majority of their shopping fighting off eager kids who’re pointing at junk food outlets, eyes wide in hopeful expectation. But this is why planning ahead can help.
Sit down with your kids beforehand, and write a shopping list. Then stick to it. Don’t budge on the list or the amount of money you want to spend. This will teach them to avoid the bane of all shoppers: the dreaded impulse purchase.
2. Budgeting and saving (Think piggy bank)
Explain to them that there’s a finite amount of money to be spent, and that you first need to get all the things you actually need. Test them on how much they think each item will cost, and why things cost more than others. Make it clear that you only have a certain amount of money for the week; otherwise you could run out of money for next week.
