Plan 2 Prosper

As a parent I know all too well the impact of ‘pester’ power on my own budget and sanity. With this ‘pester’ experience, we have found that talking with our kids about the value of money helps diminsh the frequency of ‘pestering’. (Feel free to share some of your pestering experiences or recall when you were a pesterer yourself). I have included 7 tips to help your kids learn about the managing their moneysourced from ASIC’s FIDO website.

Its never too early for kids to learn about the value of money. Learning how to manage money is a great skill that will assist them and others around them throughout their life.

Children need to understand money is a limited resource and doesn’t simply materialise from holes in the wall or from credit cards. (I know how amused I was when my son Lachlan was talking about us buying a boat and all we needed to do was go to the hole in the wall at K-Mart plaza). These days children are under enormous pressure to have the ‘right stuff’ – from mobile phones, IPODS through to shoes and branded clothing. The desire to have such items presents us all as parents with a great opportunity to encourage our kids to budget and manage their finances according to their needs and wants.

Rather than simply giving in to the demands and pester power (I know it ain’t easy), you could take the opportunity to help them work out a way to prioritise and save up for the items they want while ensuring the essential needs are met. (Much like we have to do for the household budget).

• Encourage them to think about what they want, what they need, and identify their savings goals.
• Help them decide what they really want, and to focus on their most important goals.
• Remind them to set aside (regularly) a specific amount of pocket money towards the items they are saving for.
• Help them to control impulse buying by reminding them of their goals when they are tempted to buy something that isn’t on the list.
• Encourage them to put loose change in a savings jar (or Plan2Prosper piggy bank) at the end of each day and to use this pot of ready cash to cover small personal expenses.
• Tell them about lay-by and encourage them to use this as an alternative to credit.
• Use pre-paid cards for their mobiles phones (after confirming their need vs want for one) and make the kids top up their card themselves if they spend too much 

Where to from here?

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Dan Smith is a self employed Financial Planner based in Rockhampton. He has clients in various locations throughout Australia but predominately in Central Queensland and specifically the geographic area encompassed by the Rockhampton Regional Council.

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