Teaching kids good banking skills, money habits

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Teaching your kids about good money management and banking habits from an early age can set them up with the right skills to budget, save and spend wisely as they grow older. Here are a few ideas to help them get started and heading in the right direction, according to www.asb.co.nz:

Set a good example: Children learn from their parents, so if you want your kids to grow up financially smart, it is important you lead the way and show them how it is done.

Show them how you save, budget and make good buying decisions. Teach them the difference between wants, needs and wishes. Use everyday situations to help your children learn; for example, at the supermarket, when you are paying a bill or ordering takeaways, include them in your money discussions and let them come up with ideas and decisions.

Help your kids set goals: Goal-setting is a great way to teach kids the value of money. It gives them a reason to save, teaches them to budget for the things they want, and shows them that waiting pays off.

Saving is much easier when your kids have a clear, achievable goal and a plan to get there in a reasonable time.

Open a bank account for your kids: It is important kids learn to use a bank account as soon as they can. That way, managing money becomes a part of their everyday life and they will get comfortable with it sooner.

Check out bank accounts that give younger children a good introduction to banking and managing money, while older children get the opportunity to take control of their own finances.

There are a range of savings accounts to help your child save for the things they want now, as well as the things they will need in the future.

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Make saving interesting: If it is interesting, kids will learn faster and enjoy learning too. Here are some ideas for making saving interesting:

Let them work for their money: Teach your kids that money doesn’t grow on trees by getting them to do certain household chores for pocket money, like raking the leaves, washing the car or sweeping the deck. They will learn the value of money and have some fun at the same time.

Offer rewards for good saving habits: Small treats and rewards can go a long way to motivating your kids to save harder. So, for example, if they saved their spending money instead of spending it this week, reward them with a sticker, a ‘high five’ or half an hour longer on their favourite game.

Take them shopping with you: Grocery shopping is a great way to teach kids how to spend wisely. Let them loose with your shopping list and a tight budget, and they will learn to shop based on price and benefits (over brand), and practise their math skills too. You can encourage them further by allowing them to keep any change left over.

Track savings progress: Tracking progress is the fun part of saving. One way to do this is to ask your child to draw a large thermometer and hang it on the wall. Every few days, check your child’s savings ad as they save, they can add to the thermometer.

As kids grow up, let them take charge: As your child grows up, it is a good idea to let them manage their own money and make their own spending choices. While it may be hard for you to let go, letting them take charge can be one of the fastest ways to help them learn money skills.

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There are bank accounts that give children a head start in money management. If your child is over 13, you can choose to give them the freedom to open and manage their own account, and make withdrawals with their own ATM cards (with your permission if they are under 18).

If your child is under 13, you can be in control of their account, but then transit the account into their ownership once they turn 13.

When to let them take charge: There are no hard and fast rules for when to let your child take over their finances, it is more a matter of when they are ready, regardless of age. Here are some questions you can ask yourself:

Is my child careful with money?

Have they been taught money skills from a young age?

Do they think before they spend their pocket money?

Do they have financial goals in place?

Of course, every child is different, but answering these questions may give you an indication of whether it is time for you to let go?

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