Teaching kids the value of saving
Lyn McGrath shares her top tips on how to teach kids to save.
Make it fun
When I was in year 4 I was the times-table champion. It didn't matter which number it was. I could recite them all by heart. That’s because we had the times-table’s placemats on our dinner table every night. It was something fun for us kids to do while we had dinner. It didn't feel like maths, and it made learning fun.
This also seems to be one of the keys to teaching kids about money, and one of the things I've learnt between working in the financial sector and being a mum. The best way to teach kids about saving is to not make it feel like a lesson. Make it fun.
Lollies: the one currency all kids understand
Another great way to introduce your kids to saving is by bringing money down to their level and putting it in terms they can easily relate to. One that always seems to work for me is comparing money to a bag of lollies. It’s something you can get enjoyment from, and something you want to make last. If you eat all your lollies in one big sugar binge, you won’t have any left for later. So maybe you should only have a few each night, and you make them last a lot longer. It’s amazing how simple financial principles can seem when applied to lollies!
Give them something to lose
The reductive approach is also a good way to get your kids across money. Start by giving them say $20, then take away amounts when they don’t contribute to household chores, or they don’t do their homework. Research has shown this is a great motivator for kids.
Move them onto real money
Kids understand from a very early age that money equals desirable things. So it’s a good idea to put them in situations where they’re dealing with real money, no matter how small the amount may be. That’s why savings accounts and money boxes work so well for kids. I would always split my kids’ pocket money in two. I’d deposit some money into their bank account, but also give them a coin or two to add to their money box.
If you’re looking for a bank account for your kids, CommBank’s Youthsaver account is a good example. You can set your kids up with a savings account and organise regular deposits. I started my kids on as little as $10 a week. They also earn bonus interest if you make regular donations and only one monthly withdrawal. My kids love checking their monthly balances and seeing how much they've saved.
These are just a few of the things I've picked up over the last 15 years in the financial sector and the 16 years I’ve been a mum. But I’m always learning! What are some of the techniques you use to introduce your kids to money and savings?
Please share in the comments below!
Lyn McGrath is the Executive General Manager of Retail Sales for Commonwealth Bank, but more importantly she’s the mother of two.