3 simple tips to get your kids interested in finance – and why they should be
The Ecstra Foundation is taking financial education into schools, but there are lessons that can be taught at home too.
When you're the parent it can feel like you're meant to protect your children from the burden of financial responsibility. How then do children become financially responsible adults?
Many of us have grown up in households where money was talked about in whispers among the adults. We didn't quite understand why we were in trouble for leaving the lights on or for turning the heating on instead of putting on a jumper.
If that doesn't sound like your childhood, you may have instead grown up in a place where money was no problem. Even then, money can become something that is simply present and taken for granted. Children don't necessarily understand where it comes from or how to behave with it.
Of course, these scenarios are not the only ones and everyone's experiences are different.
Ecstra Foundation is trying to fill the financial literacy hole which many young Australians have by bringing courses into schools across Australia. Its Talk Money program was launched 2 years ago and has helped hundreds of thousands of children in years 5 to 10 to learn important financial life lessons.
While the course facilitators and the kids themselves do their bit to integrate those lessons into real life, there are things the adults around them can do too.
But why should you bother?
Let's take a look at our current situation in Australia. After almost 2 years of rising inflation and interest rates, Australian households have been more focused on their money than they have been in a long time.
For a lot of people it's been a tough lesson in budgeting, spending cuts and hard sacrifices.
According to Finder's Consumer Sentiment Tracker, 74% of the population is stressed about their financial situation.
Talking to your children about finance means they can be better prepared in adult life for financial events like this. But it's also about setting them up to make good financial decisions outside of a cost of living crisis and high interest rates.
Ok, so what can you do?
Explain card payments
Financial education manager at Ecstra Foundation, Tracey West, says simply talking about what you're doing while you're doing it is a good place to start.
Several years ago we used to watch our parents pay with cash and so you could physically see the money changing hands. Nowadays, with electronic card payments, it's less obvious.
"Kids don't understand that it's coming out of a bank account that has a limited amount of money. It's not an infinite supply," West says. "It's about explaining what you are doing and explaining any costs or fees that you're paying and how you used to do it with cash."
Engage them with holidays and activities
If you have a holiday or trip coming up, or you want to plan a day out, involve your children in the process, particularly around the budgeting.
"Maybe they can research holiday spots or activities," West suggests. "Even better is giving them tasks where something has to cost them a certain sum of money. It makes them creative. Then they're more involved and they can take ownership."
Ask them to find better deals
Rather than keeping the cost of bills a secret, West points to a tip highlighted by the Barefoot Investor where parents can involve their teenagers. Explain bills to them, how much you're paying and then encourage them to research whether there are better offers out there to save money. You can incentivise them by sharing the savings.
"They get to do a bit of research, understanding where to look and understanding what the bill is, how much you're spending for electricity, and getting a sense of what things cost," West says.
"Doing that at a younger age prepares them for life after living at home. It's about facilitating a conversation and getting them to do something practical."
Start the financial journey with your kids today by opening up a kids bank account
