Having a family

How to help your children be good with money

4 min read

As an adult, you understand that money doesn’t grow on trees — at least we hope you do! But, what is your child’s understanding of money? These days, kids are pretty savvy, and the idea that any child would think money grows on trees is pretty silly. However, we’re sure plenty of kids do believe their Mums and Dads have unlimited access to cash from the bank’s generous ‘hole in the wall.’ 

Of course, children’s naivety when it comes to money is understandable. Money is complicated, and many adults struggle their whole lives trying to manage it. In reality, financial literacy is the product of life experiences and a bit of guidance. 

As parents, we all hope our children will be able to buy a home and enjoy a comfortable lifestyle when they grow up. The good news is you have a golden opportunity to get in early and teach your child money-management skills that will put her in good stead for a lifetime.

Why teach your child about money?

You may be hesitant to burden your child with the realities of money management. After all, childhood should be fun and carefree, right? Well, the thing is, teaching your child needn’t be a burden, and it can be fun.
At BNZ, we want every Kiwi — even the youngest ones — to be good money, so they can do great things with it. With this in mind, here are some simple ways you can ensure your child is better equipped to handle money when she grows up.

Learning patience

We live in a world of instant gratification. And, retailers are happy to indulge us by saying we can buy now and pay later. Of course, the price for paying later comes in the form of interest payments. As a result, it’s easy to find ourselves in debt.
So, one of the first, and perhaps the easiest, things you can teach your child is patience.

It’s hard to say no to children when they look so cute, we know. However, sometimes you’ve got to be ‘cruel to be kind,’ as the saying goes. So, when shopping, explain to your child that you’re out to buy groceries, etc., and you’re not buying anything for her. Doing so will teach your child that shopping doesn't always result in making a purchase.

Here’s another simple idea. Create three jars and label them Spending, Sharing, and Saving. Then, every time your child receives some money — maybe from chores — teach her to split it evenly between the three jars. Spending can be for small purchases, like lollies, Sharing can be for other people, like a charity, and the Saving jar can be for more expensive purchases. Doing this is a practical way to teach your child to delay gratification and think of others. 

Once the Saving jar reaches a certain amount, open up a savings account that allows your child to earn interest, set a savings goal and enjoy monitoring the progress. 

Making decisions

An essential money-management skill is the ability to distinguish between wants versus needs—what’s a must-have purchase and what can wait.

So, from between the ages of six to 10, involve your child in small financial decisions. When at the supermarket, for example, explain that you purchased home-brand breakfast cereal because it is $1 cheaper than the other brands. Ask for your child's input when considering other products along the aisle. Also, give your child a small amount of money, and let her decide how to spend it — this will also teach her how to handle notes and coins.

When at home, good-old-fashioned board games, like monopoly, are useful for developing decision-making skills — they are nice family activities, too.

Earning money

At some point, you must reveal to your child the devastating news that ATMs are not so generous, and the only reason they give you money is because you earned it. There is no better way to learn the value of money than earning some yourself, so depending on your child’s age, here are some ideas for earning pocket money:

  • Jobs around the house, like washing dishes, vacuuming and mowing the lawns
  • Babysitting
  • Making and selling crafts
  • Selling unwanted toys online
  • Doing a paper round


Earning interest

From about the age of 11, you can introduce the concept of saving for a ‘rainy day.’ Explain the power of compound interest, but don’t be vague; use specific numbers. For example, you could say, “If you save $100 a month from when you are 15, you’ll have saved more than $50,000 by the time you’re 65. If you save the same amount from when you’re 40, you’ll have saved less than $30,000 by the time you’re 65.”

Leaving the nest

Eventually, your child will be ready to ‘spread her wings' and head off to university or enter the workforce. Hopefully, she’s already learned and experienced the things mentioned in this article. Regardless, when a child leaves home, being careful with money can be low on the priorities list—experiencing the big world is far more exciting. So, to ensure your child stay on track, continue to have conversations with her about being good with money.

Teach your kids how to be good with money

Piggy banks are old-school. Prepare your tamariki for their future by teaching them how to bank the way you do, with a BNZ YouMoney account.

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