For many of us, the time of year where we’re forced to think about our finances has just passed – making it the perfect time to focus instead on how your children see money.

It’s never too early or too late to start educating your children about healthy habits, particularly when it comes to money. It all starts with how you teach them about money as a concept, and the following range of techniques will help you do just that.

1. Replace the piggy bank with a clear jar for savings
Piggy banks look great, but they do not give kids a visual representation of savings growth. When using a clear jar instead of a piggy bank, it makes the savings process visual – which is particularly beneficial for younger children’s key learning sense. A couple of mason jars will do just fine!

2. Set a good example 
Research by Cambridge University found that children form their relationship and habits with money by the age of 7 – and, like with many other behaviours and traits, they learn directly from observing their parents. It is important when they are watching not to tap the plastic casually without reviewing the bill. Conversely, do not argue about spending – especially with your spouse – as there is a high chance your children will carry this behaviour into adulthood.

3. Demonstrate the value of money
When a child see’s something they desire, tell them they can have it, but will have to sacrifice something else to get it. This demonstrates value and is much easier and more memorable than giving a lecture.

4. Shopping lists  
Always create a shopping list before going to the shops and ask your kids to help you identify necessary items for the home – and then, when you are shopping, stick to it!! This may be harder for you than the kids, but it is a worthwhile exercise: they won’t think that frivolous spending is the norm, and will learn important lessons about want vs. need and self-control.

5. ‘What is money for’ list
Create a list with your child on chart paper that narrows down the purposes of money. This would include food, clothes, toys, give to others, house, water, electricity – anything that you both decide money is ‘for’. This may help them get a better understanding of where money goes, and the purpose it serves (beyond being the way they get toys, clothes or entertainment).

6. Pocket money for simple jobs to do around the home
Use pocket money as a learning tool from an early age so you can teach your child the value of money. This can be for either a reward for doing chores around the home, teaching them the link between reward for work and imparting basic saving, budgeting and investment skills. Make sure they do their chores regularly so it becomes part of their daily routine, whether it’s making their bed every morning or putting their toys away every night. For payment, a good rule of thumb is $1 per year of age per week – if your child is 6, they could receive $6 on the condition that they have to put $2 of that into savings. Using something like an investment account, they can view how much their account has grown and slowly learn that they have the chance to earn even more when they invest. This isn’t just a great lesson for finances, but also good practice in delayed gratification.

7. Show kids the money 
Using real dollars and coins is very exciting for kids, and you want them to be excited about learning these concepts. You can make a game out of identifying the various coins and dollar bills and get them involved in the decision-making process at the supermarket – this could be giving them $5 to buy ingredients to help make a cake for the family or picking out the vegetables they will be eating for dinner.

8. Explain that every person’s work is different
To show them the value in work, point out the roles of people your child already comes into contact with daily, like their teacher, a doctor or a policeman. By giving them wide scope of people’s careers, your child can see how there are many different ways to earn money.

9. Have your older children pay for their outings
If your kids are old enough to spend weekends shopping with friends or going to the movies, let them do it on their own dime. They will soon realise the value of the dollar, especially when they have to buy their own food – it’s a real wake-up call! The best way to learn is from experience, so give your children plenty of opportunity to consider their budgets when tossing up whether to buy a new outfit or see the latest blockbuster.

10. Practice generosity
Spending your money on yourself is one thing – being able to give to those in need is a truly valuable life skill. Whether you have your children set aside a portion of their weekly pocket money for donations or have them chip in for their friends birthday presents, it’s important to normalise the concept of spending money on others and show them the value in it. You could even take them to your local charity to donate their money in person, or remind them how much joy their friend felt when they received a gift your child paid for themselves.



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