Kids without cash: How to teach them the value of money

WE'RE living in an era where technology is advancing at a rapid pace.

Babies are playing with iPads instead of building blocks and toys, and children are learning from tablets instead of books.

While the financial world is keeping pace with online banking, mobile apps and tap and go, it is making money less visible than ever before - a change which influences the way children and teenagers learn about, and engage with money.

Children are visual. Seeing cash exchanged for an item or watching coins build in value as they stack up in a piggy bank are concepts which are easy to grasp.

However, with industry experts predicting Australia could be a cashless society by 2022, how does this change the way you instil messages about the value of money with children when it's no longer seen as a tangible resource?

MAKING CENTS: You can still teach children the value of money in an ever-changing world.
MAKING CENTS: You can still teach children the value of money in an ever-changing world. Thinkstock

Age 5 - 7:

Establish ground rules for saving and spending. Can you wait to purchase an item? Is it a need versus want? Withdraw money and use savings jars or piggy banks. Money goes into separate jars for buying an item and saving for birthdays or Christmas. Mobile apps are great as a budgeting tools and are a helpful way to show the connection to online accounts.


Age 8 -11:

Include children in the shopping budget. Explain choices about generic versus branded items and explain the difference in value and cost. Get them involved in making purchasing decisions. For example, take them shopping and ask them to buy the bread and milk with a set amount of money and see what choices they make. Any spare change goes into their savings account.


Age 12-15:

Open communication about financial decisions and money habits becomes even more meaningful with young teenagers. Start introducing them to financial terms such as compound interest. Explain how it works and give them examples. Teach kids the difference between "interest paid" by a financial institution as a reward for savings behaviour versus "interest charged" by financial institutions for spending behaviour.


Age 16-18:

At this stage, many teenagers are either looking for or have a part-time job. Now is the time to encourage them to get into the habit of dividing their earnings into savings and spending. Talk about their plans for the future and the costs associated. Will they need tuition fees, a car for apprenticeships, travel money, books? It's important they understand that every cent they save now can help them on their journey to reaching a future goal.

Play the game

Suncorp is working with the Financial Basics Foundation to support young Australians develop their financial literacy. Central to this is ESSI Money, powered by Suncorp, a free financial literacy game designed to be used in Australian high schools.

If you would like to play, encourage your teachers to register here:

Topics:  kids money saving

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