Whilst older generations thought it inappropriate to talk about money, we’re now in an age where it is almost irresponsible for us not to discuss finances…especially with our children.
Many young Australians are financially illiterate and, it’s our job as parents, to ensure this trend doesn’t continue. We need to be able to send our kids out into the adult world armed with the knowledge and skills they need to make good financial decisions.
So, what is the best age to start discussing money with your kids? The sooner the better!
There’s a lot of ways that the concept of money can be introduced…right from the early age of 3 years old!
Here is a guide, based on information from the ASIC website, as to what concepts can be taught by age group.
- Money is needed to buy things.
- Money comes in the form of notes and coins that have different values.
- You earn money by going to work.
- There is a difference between what you need and what you want.
- Compare prices to make sure you are getting the best deal.
- Be careful when shopping online and never give personal information.
- Be patient when saving your money so that you can then make choices about how to spend your money.
- It’s better to use cash than credit.
- Understanding the difference between debit and credit cards.
- It’s good to have savings in case of a money emergency.
- When you work, you need to check your payslip to ensure you have been paid correctly.
Before you start a conversation about money, its always beneficial to determine your own views on money…are you someone that likes to put a certain amount away each week? Do you spend now and pay later? What behaviours do you expect of your children when they are starting to manage their own money?
In addition, especially with older children, it’s important to have a conversation rather than give a lecture. To build a trust with them that will then bring them back to you for advice first if they make a mistake rather than a quick fix that might end up financially hurting them even more.
Keep the conversations going over time so that your children reap the benefits of your knowledge.