5 important money lessons you can easily teach your kids

Financial expert Helen Baker shares her tips on setting your children up for life.

There are some money lessons that have been thrust into the spotlight as a result of the COVID pandemic that apply to us all. These school holidays provide a great opportunity for us to teach our kids the do’s and don’ts of managing money, and how to cope financially in times of hardship. Here’s five easy and fun lessons to impart.

1. Plan for a rainy day

Who could have foreseen that airlines would be grounded, businesses shuttered, borders closed, and all of us confined to our homes? Although we may not know what form it may take things can and do change. That could be from a global pandemic, personal health issues, redundancy, business collapse, family breakdown, or any number of other possibilities. And we need to have a Plan B.

COVID presents a great opportunity to teach kids the value of putting money aside for a rainy day, and making it a regular habit.

During the school holidays. how about making some, ‘Save’, ‘Spend’ and ‘Give’ jars. Grab three jars, label them and encourage your children to fill each, and distribute accordingly.

2. Don’t spend more than you earn or borrow more than you can afford

Household debt is at record levels with families paying off hefty mortgages car loans, credit cards and so on. Losing income, due to COVID leaves us equally at risk of not being able to pay and forced into bankruptcy.

Financial discipline and budgeting is something we should all be doing all of the time, in good times and in bad. It’s living within our means and adapting our spending habits as our incomes change. Teaching kids from an early age that money doesn’t grow on trees can help them better appreciate its value into adulthood.

During the school holidays, why not play a guessing game. Get the children to bundle a selection of toys together, and guess how much they cost. How does this relate to their pocket money? How much pocket money do they need to use to buy the toys back?

3. Cash is king

Just because you can afford something doesn’t mean you have to buy it. And this is something kids can really struggle with at times.

Given the uncertainty surrounding COVID, it’s a good time to show kids the difference between wants and needs. Sure, you could afford that new TV now, but will you still have a job if we experience waves, two, three and four or the pandemic? Just like a bird in the hand is worth two in the bush, cash can be more valuable if left and spent.

During this school holidays why not play with the toy cash register. Empty the pantry and play a game of shopping, using cash (or toy cash). Or they can experience paying for items using cash when you’re out shopping, seeing how much change they get. Build the connection.

4. Be adaptable

Increasingly, people are ending their working lives in a different profession than when they started. Things can change quickly, and you may end up having more jobs than you expect. This adaptability is a great thing to demonstrate to kids. That you don’t have to do only one thing for the rest of your life. That you can earn money doing different things and putting your skills to use in different ways. That you can adapt to change, rather than give up and go broke.

During school holidays, why not play a game of dress up. Dress up as a job they want to be when they get older. Or play a game of choosing what to dress up and think about or research, what you would need to study/know to get that role. And what do they earn? This can be deeper or less intense, depending on the age of the children.

5. Money isn’t everything

Many people have been able to work from home and spend much more time with their family. We’ve found ways to have fun together without leaving the house. We’ve been more proactive in reaching out to friends and colleagues more isolated than we otherwise would have.

Spending time with loved ones is more important than earning big money. After all, we work to live, not live to work.

During school holidays create a list or draw all the fun things that children have done this year or have valued during this pandemic. And how this varies from previous years. So draw a ‘then and now’ and what they would like for the future.

This article was originally published in New Idea magazine and also in Family Circle magazine