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Five ways to encourage kids with financial literacy

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One of the most effective ways to instil these values is by encouraging children to do chores and manage their own pocket money. Photo: Freepik.com
One of the most effective ways to instil these values is by encouraging children to do chores and manage their own pocket money. Photo: Freepik.com

“I need some money.” Along with “I’m bored.” and “Are we there yet?” this would have to be a fairly typical refrain in most families with kids under the roof.

Despite the rising cost of living children are growing up in an era of instant gratification.

The need to teach them the value of money, of working towards a common goal, and that it’s important to maintain relationships as well as material possessions is as important than ever.

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One of the most effective ways to instil these values is by encouraging children to do chores and manage their own pocket money.

When children contribute to household tasks, they’re not only rewarded by a sense of accomplishment and appreciation for the love and hard work that goes into keeping a family going and learn crucial life skills such as time management, organisation, and problem-solving.

Kids don’t have to be paid for chores but money is definitely a great motivator!

The Parenting Report 2023, which surveyed 1033 Australian parents of children under 12, found 60 per cent of parents gave their children pocket money for doing household chores, with cleaning their room and washing the dishes topping the list.

Most Australian kids receive some pocket money each week with the average weekly allowance at $8, down from $10 a year ago presumably from cost of living pressures. NSW kids are the top earners, with an average weekly allowance of $11.

And with many parents and carers moving away from cash to online transactions in general, they’re moving to app-based solutions for their kids’ pocket money too.

Since its launch in 2016 the Spriggy prepaid card and mobile app for Australian families and kids has amassed 850,000 users, and it’s just one of the kid-friendly bank and saving accounts with cool-looking cards and apps on offer today.

Spriggy acts as a digital wallet allowing parents and carers to allocate, track, control and automate pocket money payments, and provides an interactive platform for children to learn about money management and set goals.

The idea is that if children learn to manage their own money effectively at a young age, they’ll develop the financial literacy they’ll need when they are older.

When children contribute to household tasks, they’re rewarded by a sense of accomplishment—but pocket money is always welcome too. Photo: Freepik
When children contribute to household tasks, they’re rewarded by a sense of accomplishment—but pocket money is always welcome too. Photo: Freepik

Five ways to get your kids going with chores

  1. Set expectations

Before introducing pocket money, establish clear expectations regarding chores. Create a list of age-appropriate tasks and assign them to each child. But don’t expect them to do it as well as you would and praise their effort. This not only teaches them responsibility but also reinforces the idea that privileges come with certain responsibilities, and that their contribution to the common good of the family is appreciated by you too.

  1. Set the amount

This can be based on factors such as age, the family’s financial situation, and the chores they are expected to complete. Barefoot Investor family finance author Scott Pape recommends a “three-jar” system: spending, saving, and giving. Allocate a percentage of the pocket money to each category, emphasising the importance of saving and charitable giving.

  1. Discuss and review

Chat about money matters with your children regularly and work on a positive family attitude towards money and the opportunities it offers for enjoyment, as well as the temptations for selfish hoarding and thoughtless spending. Discuss their goals, encourage them to save for something they want, and review their progress periodically.

  1. Encourage saving

Teach your children the value of delayed gratification by encouraging them to save. Set savings targets and discuss the benefits of saving for long-term goals.

  1. Encourage entrepreneurship at the service of others

As your children get older, allow them to explore opportunities beyond regular household chores. Encourage them to think creatively and find ways to earn extra money by providing services to neighbours, family, or friends. This helps them understand the relationship between work, income, and community-building.

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