Money

Kids - money skills count

For many children a new year means a fresh opportunity to earn pocket money. For mums and dads, pocket money can be a valuable tool, helping to teach children simple money management skills that could last a lifetime.

A recent study by the Commonwealth Bank found Australian parents collectively hand over around $1.4 billion worth of pocket money annually. It sounds like a lot however it works out to about $10 per week each for children aged 4 to 15.

The majority of parents - 81%, believe that children don't understand the value of money unless they earn it. So most kids receive pocket money in exchange for completing simple chores like washing the dishes.

It's not just pocket money that pours into the nation's piggy banks. Around one in seven children tap into other ways to raise a bit more cash - the most popular being presents, the tooth fairy or as a reward for getting good marks at school. These appear to be lucrative sidelines, with Australian children each earning an average of about $276.18 from these sources over the past year.

All this cash can really add up. The thing is, only one in three children tuck some money away on a regular basis. The same proportion hardly ever or never put some pocket money into their bank account. Instead, the cash tends to go on food, snacks and lollies, with clothes, presents and music downloads also eating up a good chunk of our children's money.

That's a shame because children can learn smart money habits from a young age, and with a few simple strategies you can encourage your children to develop a healthy approach to money.

A worthwhile first step is opening a savings account for your child. There is no shortage of high interest savings accounts available just for kids though with some you need to meet certain conditions to earn a decent rate - like depositing a minimum amount each month. That's not such a bad thing as it rewards kids for growing their savings.

It's also helps to talk with your child and help them work out a goal they would like to save towards - maybe a new toy or a friend's birthday gift. Explain how long it will help them reach their goal based on the amount they save each week, fortnight or month. There are plenty of online calculators that can help here.

Parents can further encourage children to save by acknowledging milestones with small bonuses. For example, you could offer to tip a few extra dollars into their account once they've reached a particular balance.

I realise that many of today's working parents are time poor but setting aside a few minutes to chat with your children about money matters makes sense. In our increasingly cashless society, kids need to understand that money doesn't simply pop out of a hole in the wall, and being able to buy the things we need and want is possible with a bit of planning and commitment.

Paul Clitheroe is a founding director of financial planning firm ipac, chairman of the Australian Government Financial Literacy Board and chief commentator for Money magazine. Visit www.paulsmoney.com.au for more information.

Topics:  children financial literacy opinion paul clitheroe


Stay Connected

Update your news preferences and get the latest news delivered to your inbox.

Give the next gen a chance: Men's Shed founder

IDEA: Les McKenzie has a plan to help youths stay off benefits.

Les McKenzie has proposed an idea to help young people

Give a gift for dogs and cats in shelters

RAISING HOPE: Alice Thorn, with help from her rescue dog Penny, is leading a fundraiser to buy a Christmas present for every shelter animal on the Coast.

Student aims to buy every shelter pet a pressie

Grateful council says thanks for giving heaps

MIGHTY EFFORT: Cr Jess Glasgow, Noosa volunteers Robyn and Paul Jenkinson with Cr Joe Jurisevic at the special brunch.

Noosa volunteers day in the sun

Local Partners

Facebook solves stolen car mystery

THE social media site might get a bad wrap from time to time but this week it's proven to be a crime-solving wonder.

9 reasons to take the kids to Woodford Folk Festival

FAMILY FREINDLY: Woodford Folk Festival has something for everyone.

If you're thinking about leaving the kids at home, think again

130,000 music lovers get set for folk festival

Getting into the music at Woodford Folk Festival.

Pre-festival ticket sales up 15%

Market-goers are gobbling up the Christmas puddings

Puddling Lane Queensland Christmas puddings.

Christmas wouldn't complete without a traditional Christmas pudding.

9 reasons to take the kids to Woodford Folk Festival

FAMILY FREINDLY: Woodford Folk Festival has something for everyone.

If you're thinking about leaving the kids at home, think again

Jennifer Lawrence apologises to the people of Hawaii

Jennifer Lawrence sorry for 'offensive' story

130,000 music lovers get set for folk festival

Getting into the music at Woodford Folk Festival.

Pre-festival ticket sales up 15%

Cruz Beckham's single a 'one-off'

He is not planning to launch a full-time music career yet.

Louis Tomlinson's mother dies aged 42

Louis Tomlinson's mother has died.

Star Wars spin off gets green light grom Lucas

Riz Ahmed, Diego Luna, Felicity Jones, Jiang Wen and Donnie Yen star in the movie Rogue One: A Star Wars Story.

Lucas said to have enjoyed the latest Star Wars spin-off

Essential to get new Maroochydore CBD fundamentals right

LOOKING AHEAD: The central business district at Maroochydore is planned to be the heart of the Sunshine Coast.

SunCentral reports good progress on 53ha Sunshine Coast city heart

'Crucial' farm land eyed by defence department

Lawson Geddes moving the Brangus cattle to higher ground - which is the land the Defence Department is interested taking for the Shoalwater Bay expansion.

"You can't have one without the other.”

Former Shark Show for sale for $1.3 million

Vic Hislop at the old Shark Show.

TALK about a jaws-dropping real estate opportunity.

There's a whole lot of luxury in this home

The Endeavour Foundation's latest prize home in Mountain Creek.

WHEN it comes to desirable homes, it's hard to go past a prize home.

BREAKING: Residents win battle of Buderim

PLAN: Previous plans for the aged care facility that was proposed to have a main entrance on Burnett St and staff and emergency access onto Pine St which sparked community outrage.

Serenity saved as residents score win in legal appeal

Ready to SELL your property?

Post Your Ad Here!