Financial literacy is an important life skill that hasn’t previously been consistently taught in schools. The good news is that looks set to change, with both major parties supporting its inclusion in the curriculum in the coming years.
But in the meantime, as parents we play an important part in giving our tamariki the knowledge and understanding to help build their financial confidence and set themselves up for the future. Not sure where to start? Here are five important tips to help you help your kids.
1. Money skills start with you, as a parent
As a parent, you’re likely to have the most influence on your child’s financial confidence, but just because you’re influential doesn’t mean you have to be an expert. You might still be learning about how to best manage your money alongside your children, and that’s okay! It’s never too late to educate yourself and your family about how to set a budget, save for things you want or need, and how to invest for the future.
There’s lots of support available if you want to be better with money, like speaking to a financial adviser or utilising a budgeting service. Even free guides and services such as or can help you feel more confident before you tackle money matters with your children.
You may be paying down some debt and getting a budget in place so you can gain financial control. Talk to your children about how this process works, and what changes you can make as a family to reach your goals sooner.
Sharing your attitudes towards money and the options you have available can be a great learning experience for your children. This way, you can decide the financial direction for your family together.
There are so many more resources out there today to help educate yourself on finance and money. As a kid the hours playing Monopoly definitely taught me some skills around money, patience and having cash on hand!
2. Teach kids the value of money by getting hands-on with it
From a young age, you can teach children about the role that money plays by getting hands-on with it. Playing shops and using toy money to pay for goods might seem small, but it’s a great first step towards basic financial literacy. As your kids get older, get them to guess how much the grocery, café or toy shop items might be; this can help give them an understanding of how much things cost.
You might be able to make those weekly trips to the supermarket more enjoyable (and educational) for older kids if they’re part of the decision making. Try putting them in charge of spotting weekly specials, using a calculator to add up your purchases as you go, or making sure you don’t go over your weekly budget.
Opening a savings account or KiwiSaver account for your children can be another way to educate kids about long term savings or investments. Be aware that a KiwiSaver account can only be used for saving towards a first home deposit or retirement.
I have encouraged my children to go beyond budgeting and saving, to learn more about the world of investing. My two teenage daughters have very different money personalities and encouraging them to invest (even small amounts) in both KiwiSaver and a managed fund, is not only growing their money for the future but also teaching them about the ups and downs of investing.
3. Give kids the opportunity to earn and spend an allowance
Earning pocket money is another great way to physically demonstrate how money works, that it needs to be earned, and how far it will go. Pocket money can then be used to save up for something special, or as a real-life example of how much things cost.
Be clear about the chores your children can do around the home – standard chores they need to do as part of your family, and the extra chores they can do to earn money. Some children are keen savers, and others might need a little more encouragement!
4. Encourage kids to plan and save for future purchases
The concept of saving is a tricky one for some kids, so it’s great to get going early with this skill. Let’s say you decide to give your child weekly pocket money for general chores around the house. Instead of spending it right away, encourage them to save up for something more substantial like a special toy or activity during the school holidays. Even putting aside a few dollars each week can add up to something significant over time.
If you need help encouraging them to save, print off a picture of something they want to buy as a visual aid. You could also put their pocket money into a savings account each week, rather than have the temptation of real cash in their wallet or in a money box in their bedroom.
Saving money is certainly a lesson in patience - make sure you celebrate when they achieve their goals. If kids get a real sense of satisfaction when they purchase something they’ve been saving for, it could be a lesson that lasts them a lifetime.
5. Help your kids avoid debt and other money traps
As parents, it’s our instinct to protect our children. The same principle applies to protecting them from getting out of control with debt with credit cards or loans. You could talk to them about using a debit card rather than a credit card – so they can have the convenience of being able to make online purchases but are only able to access money that they really have. Educating our kids on when it makes sense to get a credit card, and when it doesn’t, can be a valuable life lesson for increasingly independent teens.
Help your young adults understand that a getting a credit card or taking out a loan can be a useful tool to purchase a big-ticket item, but not for small and frivolous purchases. Make sure your kids know they’ll need to pay off their credit card or loan every month and get them to talk through how they’ll make sure they can do this before signing an application form.
The concepts of ‘good debt’ and ‘bad debt’ are also important. Good debt includes things like a mortgage for a home or significant asset or an interest-free student loan that is helping your child prepare for their future. Bad debt could include high-interest credit cards and payday loans.
Not all debt is avoidable, and you shouldn’t feel bad if you need to take out a loan from time to time, but staying on top of debt repayments is a great way to model good money management for your kids.
Setting your family up for the future
For a long time, it was uncommon for parents to discuss financial matters with their children. Money has been a taboo subject for many families, but we’re starting to see these barriers being broken down as parents learn to have conversations with their kids around money.
There are plenty of ways to get your kids involved in decision making around their finances – all my children have both KiwiSaver and a managed fund, and we all decide what we will pay for and what they will pay for. By taking the time to teach your children about savings, budgeting and investing from an early age, you can help set them on the path to a successful financial future.