Video: Teaching kids how to budget to become financially savvy
Video about teaching kids about money
David - Helping your child become a savvy money
manager is all about teaching them how to take control
of their money. Often they have no control of the money
that they're going to earn because they're in a job, they're
getting one pay packet a month, or a week. Where they
can take control is how they spend that money, and how
they work out and decide what's left over for savings
And that starts with doing their own budget. I know it
sounds boring, but they've got to go through
Libby - If they do have a savings goal, they
don't know what money is left over to save unless they
actually sit and do a budget like adults would do.
So you help them work out what it costs them each week, and
then they can see over the month the outgoings, and then
they can see what's left over is their saving, then they
have to put that away at first and then they can... So,
you sort of introduce this in secondary school where the kids
are then taking a bit more control of their money and you
might pay them on top of the pocket money so that they
have a monthly budget plan, and part of that is they have to
pay some of their costs, like maybe lunch money once or
twice a week, and their transport or bus fares or things
David - And in the old
days, we used to write it down with a pen and paper. Now there
are apps on smart phones, you can do it on the web,
that's got to be a lot more engaging for them. So they
can actually see where their money's coming from and where
it's going to.
Now they're going to be shocked when they see where
it's going to because they'll have some idea that that
they're spending in one area but inevitably it'll be a lot
more than they think. So it's building that
It's also doing things like saying understand what a credit
card is and how it's different to a debit card, and how
it impacts on your saving and your money management.
It's all about giving them the confidence to ask questions.
If they don't understand something, then they ask about it,
and you've got to lead that. You've got to give them the
confidence to do it. It's arming them with the tools to avoid
scams. If something seems too good to be true, it usually
Making them understand that if they get an email saying
'Give me your account details on a bank and your password', to
have the confidence to say 'My bank would never do that
so this is a scam, I'm not going to hand over that
information.' It's all about confidence and knowledge which
you can arm them with.
If they're asking about what are my savings going to look like
if I put my money in one area mand another, point them towards
their bank website with all the tools that are there that
they can put 'what if's' into different boxes.
Try and build an enquiring mind in your children when it
comes to managing your money, because there are lots of
answers out there to solve financial problems, but
you need to go and find them and talk to people.
Always encourage them to be comparative shoppers. Even with
mobile phone plans, you can go on websites now that compare
all the mobile phone plans.
Think about when we didn't have mobile phones and what we
would spend our money on, and the bills our kids pay now. So,
make sure they understand usage means more money. How to
get the best plan, all of those areas. Being a smart savvy
consumer, saying to a shop keeper 'Hey, is that your best
price?' Not being embarrassed to ask that is a
really important teaching tool too.
Libby - That's right, they can always ask. It'
s good to instill in kids the idea that never be afraid
to ask, and especially like in a shop if they think somebody
is accidentally charging the wrong price, and they've seen a
different ticketed price, have the confidence to
politely say 'oh no, I think they've made a mistake', and
they can always just be told no, that's not right, but there's
nothing scary about being told no, it'd be more of a shame if
they didn't have the confidence and it might turn out that
they were right all along.
And it's fair enough with things like mobile phones that
parents might give a bit of extra money towards that because
these days kids aren't using landlines, so you're not
getting the same big phone bills so it's fair enough that
the kids might put a bit of their money they've earned into it
and parents put a bit of money into it.
David - It's all about teaching your kids to
differentiate between good options and bad options,
and above all, that they take control of their money.
They do that by knowledge, and by confidence.
Last updated: 09 Aug 2016