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Teaching children about money management is important from a very young age.  UK research shows that financial habits are formed by the age of just seven, so you shouldn’t leave it too late.

It’s definitely important to steer your kids in the right direction from the start. Here are 5 fun ways to teach kids about money…

1. Use play to teach basic money concepts

Make play money with paper and crayons, and clearly mark the different values on each note. Run your own mint by rolling and pressing different coloured coins out of plasticine and play dough.

Toy cash registers and supermarkets are popular roleplaying items for children, encouraging them to learn about the exchange of cash for goods. They can also run a “café” using play tea sets, where you can be a paying customer.

2. Try online games and apps

There’s a host of online games and apps that can help kids learn about money. Many are US based, but Australian-specific sites include Coinland (run by the Commonwealth Bank) and ABC’s Count Us In, with games designed to help children understand basic number concepts.

3. Get your child to help you when shopping

Everyday opportunities like grocery shopping are a great way to explain the difference between needs (apples) and wants (chocolate biscuits). Make a list of all the things we buy with money and find a fun way to sort items into things we need and things we want.

Showing children how to pay and check change will also help them with counting and numeracy – critical for any junior accountant!

Guessing games are also useful: have your child estimate how many items are in a bag of groceries, or how much they cost.

4.  Reward first savings efforts

Make a savings chart to show how one week’s pocket money may buy some lollies, but a month will buy a toy, and six month will buy the dream Lego set they’ve got their heart set on. By the time they reach that goal, they may not even want it any more.

Decorating a piggy bank or savings jar is also a good way to encourage children to put away their spare coins. They can gradually watch the money level rise as they add coins.

5. Collect five cent coins

Small five cent coins often get dropped, with adults not even bothering to pick them up (a bad lesson for children!) Encourage your child to save the ones they find, so they can see how many tiny coins eventually add up to more valuable dollars.

Relatives may be happy to save five cent pieces for young children, to be used as play money or put in the savings jar.

Remember that children pay attention to everything we do and the best way to avoid teaching kids bad money habits is to be a good money manager yourself.

Having children can actually be a great catalyst for improving your own money management skills. Pay attention to the messages you are sending your child about money and show restraint when it comes to your own spending.

By Kirsty Lamont, Mozo.com.au
Kirsty Lamont is a director of Mozo.com.au which helps Australians compare savings accounts, credit cards, insurance and other financial products.  Kirsty was one of the launch team for Virgin Money when it started in Australia in 2003, and also held a senior role at BankWest before joining Mozo in 2007.  A consumer finance expert, she has access to Mozo’s up-to-the-minute data about different financial products on offer.

 

  • Thanks great article,children learn from the parents with money!

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  • I agree it is a good idea to take your children shopping with you.
    When they are old enough you can show them the docket, noting the total and how much you got for that money. As the grandparents not to let the kids have everything – sometimes nothing if they take them shopping with them at all. I had to teach my niece what her parents to teach her, that you can only buy what you can afford – “that money doesn’t grow on trees”. She was making demands in a shop one day, and stopped in her tracks when I truthfully told her that I might not have a job for much longer and there would be a lot less treats in general. I was lucky becuase I wasn’t included in that particular retrenchment. Her Dad had been retrenched when she was a baby and I saw first hand the stress and hardship it caused while he was desperately searching for another job at a time when employers weren’t employing more people and that included other types of jobs. He didn’t care what he did as long as he was physically able to do it.

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  • I always take my kids shopping with me explaining why I’m purchasing one brand over another and shop saving techniques .. I get them involved and they learn so much .. Some other feet good tips here though .. Thanks for sharing


    • Agreed – the lead by example suggestion is great. So glad to read you are doing this.

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  • Really good knowledge to know! Thanks for sharing this!

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  • Thanks for sharing this interesting and informative article; play is a great way to learn.

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  • yeah this is a great skill that kids should learn and hopefully they will set for life

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  • these are great tips!
    thank you for posting

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  • Always good to teach them to spend some and save some.

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  • Such beautiful photos – thanks for sharing

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  • Great ideas to get the kids about money, thanks for sharing.

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  • Im lucky my eldest girl just loves money and is really smart about it too. She loves to save for things that she wants

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  • Some great ideas for teaching kids about money!!

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  • Writing a shopping list and going shopping is a good money lesson. So is the school bank books and watching the small amounts of savings grow.

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  • I often get my kids to work out how much something will cost and get them to pay.

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  • My girls love seeing the balance grow on their passport account.

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