We've a 5yo who is currently in kindergarten and she's now started some school banking with her Commonwealth Bank Dollarmite Account.
It's got us thinking about what sorts of things we can do to give her a good financial education from an early age. I'm not talking about forcing a ridiculous $$$$ doctrine down her throat at an early age. I'm taking about incorporating a sensible financial education into a balanced life for a young child, when she's ready, to give her a good start in later life.
I'd be fascinated to hear the success stories of what your parents did for you and what your doing for your own children.
I guess many of us look back and think, if only we'd learnt and took action about budgeting, compound interest, saving and investment when we were 18 or 20. But what if we'd actually started to regularly save and invest when we were five? Hee heee.......compound interest can be a wonderful thing to a 20yo wanting to buy their first investment property if good habits had begun 15 years before.
I'm trying to think of ideas that would go beyond just putting a few dollars a week into a Dollarmite Account.
I think I remember reading something, years ago, about a story that was on A Current Affair(or one of those....) that looked at some interesting appoaches. I may be wrong, but I think Steve Navra may have even been involved? If you were Steve, perhaps you could add your thoughts to this topic and improve on my rather vague recollection of the details and outcomes of the story?
My rough recollection of one approach was instead of giving your child, say $20pw pocket money, you now give them $100pw. You can imagine the initial reaction of most teenagers! "Son......I'd like to give you an extra $80pw pocket money. Is that ok with you?" BUT.....this is done with a few conditions!!
Firstly, they must save a certain percentage of the $100. Let's say for now 20%.
Secondly, they now become responsible for paying(out of their $100) some of their own 'running costs'.
So it's not really a matter of you suddenly having to find extra $$$'s, but rather its a matter of making the child more aware and responsible.
While we've only been thinking about this for a couple of days, we've started off a similar trial.
My daughters major 'expenses' at the moment are a 30 cents ice block at school each day if she eats her lunch. Ahhh....don't you wish that was your only expense?
We've initially decided to trial a $10pw pocket allowance whereby she must save $5pw in her Dollarmite account and she can decide how she spends the remaining $5pw. However, she's also now resposible for paying for her 5 x 30 cents iceblocks out of the $5.
So far, she's taken to it like a duck to water and has even asked really good questions like "What if I spend it all before Friday?" and "Do I get to keep what I don't spend?".
Hey.......maybe she's too young and we'll try something like this when she's older. But at this stage, we'll monitor things and see how she goes. Kids always seem to be capable of learning more than we give them credit for. NB. There's also a box of 'Cashflow for Kids' put away in the cupboard for when she gets older.......although at this rate she'll probably thrash me in no time!
Ok........so what sorts of things may she learn?
She now knows what a bank is. She knows how to complete a deposit slip. Soon she'll experience 'interest' and eventually compound interest. She grows up with an initial introduction to investing/saving a certain percentage of what she makes. She becomes responsible for certain financial decisions early on in life etc etc.
Where to in a few years when some dollars have been saved in the Dollarmite Account?
Maybe she can buy a few shares and learn something about companies, capital growth, dividends, alternative investments etc.
And lets not forget charity. At this stage she sponsors a World Vision Child in her name but maybe in a few years time she can be directly responsible for paying for the first month's contribution or the like.
And maybe, just maybe, when she's somewhat older...... but many, many years younger than I was....... she'll have enough to buy her first investment property and also learn about rents, property investment along with some charitable donations.
But back to my original question.
What were some of the better methodologies you were exposed to as a child(if any) and what has worked with your own kids?
It's got us thinking about what sorts of things we can do to give her a good financial education from an early age. I'm not talking about forcing a ridiculous $$$$ doctrine down her throat at an early age. I'm taking about incorporating a sensible financial education into a balanced life for a young child, when she's ready, to give her a good start in later life.
I'd be fascinated to hear the success stories of what your parents did for you and what your doing for your own children.
I guess many of us look back and think, if only we'd learnt and took action about budgeting, compound interest, saving and investment when we were 18 or 20. But what if we'd actually started to regularly save and invest when we were five? Hee heee.......compound interest can be a wonderful thing to a 20yo wanting to buy their first investment property if good habits had begun 15 years before.
I'm trying to think of ideas that would go beyond just putting a few dollars a week into a Dollarmite Account.
I think I remember reading something, years ago, about a story that was on A Current Affair(or one of those....) that looked at some interesting appoaches. I may be wrong, but I think Steve Navra may have even been involved? If you were Steve, perhaps you could add your thoughts to this topic and improve on my rather vague recollection of the details and outcomes of the story?
My rough recollection of one approach was instead of giving your child, say $20pw pocket money, you now give them $100pw. You can imagine the initial reaction of most teenagers! "Son......I'd like to give you an extra $80pw pocket money. Is that ok with you?"
BUT.....this is done with a few conditions!!Firstly, they must save a certain percentage of the $100. Let's say for now 20%.
Secondly, they now become responsible for paying(out of their $100) some of their own 'running costs'.
So it's not really a matter of you suddenly having to find extra $$$'s, but rather its a matter of making the child more aware and responsible.
While we've only been thinking about this for a couple of days, we've started off a similar trial.
My daughters major 'expenses' at the moment are a 30 cents ice block at school each day if she eats her lunch. Ahhh....don't you wish that was your only expense?
We've initially decided to trial a $10pw pocket allowance whereby she must save $5pw in her Dollarmite account and she can decide how she spends the remaining $5pw. However, she's also now resposible for paying for her 5 x 30 cents iceblocks out of the $5.
So far, she's taken to it like a duck to water and has even asked really good questions like "What if I spend it all before Friday?" and "Do I get to keep what I don't spend?".
Hey.......maybe she's too young and we'll try something like this when she's older. But at this stage, we'll monitor things and see how she goes. Kids always seem to be capable of learning more than we give them credit for. NB. There's also a box of 'Cashflow for Kids' put away in the cupboard for when she gets older.......although at this rate she'll probably thrash me in no time!
Ok........so what sorts of things may she learn?
She now knows what a bank is. She knows how to complete a deposit slip. Soon she'll experience 'interest' and eventually compound interest. She grows up with an initial introduction to investing/saving a certain percentage of what she makes. She becomes responsible for certain financial decisions early on in life etc etc.
Where to in a few years when some dollars have been saved in the Dollarmite Account?
Maybe she can buy a few shares and learn something about companies, capital growth, dividends, alternative investments etc.
And lets not forget charity. At this stage she sponsors a World Vision Child in her name but maybe in a few years time she can be directly responsible for paying for the first month's contribution or the like.
And maybe, just maybe, when she's somewhat older...... but many, many years younger than I was....... she'll have enough to buy her first investment property and also learn about rents, property investment along with some charitable donations.
But back to my original question.
What were some of the better methodologies you were exposed to as a child(if any) and what has worked with your own kids?
