From 14 to 20 March, the world celebrates Global Money Week. To mark the occasion, the Australian Securities and Investments Commission (ASIC) has released some practical tips for parents that will help children to develop good money habits in later life. (The key is to talk about it — the earlier, the better.)
Piggy bank image from Shutterstock
The traditional way of teaching kids about money — counting coins, saving in piggy banks, the board game Monopoly — are becoming increasingly irrelevant as we march indomitably towards an all-digital currency. It's entirely possible that real, tangible money will be antiquated by the time our children reach adulthood.
With cash playing an increasingly invisible role in financial transactions, new teaching methods are needed to set kids up with the money skills they need for life.
As we kick off Global Money Week, ASIC has released some financial literacy tips for 21st century kids. Many of these methods simply involve talking to your children about everyday money situations as they happen.
The key is to communicate how money works at an early age — according to ASIC's research, over 80 per cent of 15-year olds in Australia already have a bank account, so it's important to teach them about budgeting and planning before bad habits set in.
In no particular older, here are ASIC's top tips that should see your offspring grow into financially responsible adults:
- At the ATM: "Explain where the money's from and how you've earned it; it's not just a hole in the wall where money comes out."
- At the supermarket: "Prepare a list, research prices and how you can save money if you shop around."
- Doing a budget: "Involving kids in discussion about family budgeting can prompt learning about differentiating between needs and wants, costs and spending."
- Earning money: "Pocket money or income from a part-time job presents opportunities to discuss setting financial goals and saving up for them and understanding the value of money."
- Mobile phones: "Discuss options for phone plans and checking and managing data usage to control costs."
- DIY Research: "Encourage older children to visit ASIC's MoneySmart website and use its free calculators, apps and resources, as well as tailored information for young people starting out."
ASIC has also stepped up its support for Australian school teachers. The government agency's MoneySmart Teaching program has received a boost via the addition of MoneySmart Maths; an Australian Curriculum-approved financial mathematics module for primary students that focuses on meaningful real-life situations. You can check out the module for yourself on the ASIC's website.