Raising money-smart kids is a goal for many Aussie families, but the classic method of weekly pocket money may not be the answer to prepare them for the financial challenges of adulthood.
This is according to ME Bank who conducted a study to see which money experiences during childhood and early adulthood had the most impact on financial wellness later in life.
From the 1,000 adults surveyed 59% identified themselves as being “effective savers” and 56% said that they were “financially comfortable” - both significant indicators of financial wellness.
“If you want to help your kids be good savers and increase their chances of being financially comfortable, exposing them to good money experiences during childhood is important,” said ME’s money expert, Matthew Read.
“These experiences seem to instil an attitude to money that becomes almost innate later on.”
Early lessons make a lifetime of difference
ME’s study indicated that 38% of those surveyed gained their most valuable savings and money lessons when they started in the workforce.
But it also suggested that many believed discussions about money were underdone in the family environment, which could reflect Aussie parents’ inability or unwillingness to raise the subject of finance.
The highest indicator of financial wellness came from those individuals who had been involved in financial conversations, family business or budgeting activities and had good role models within their family network from their childhood.
74% became good savers as a result of the advice and discussion they received during childhood, while only 54% of those who received pocket money as a kid saw themselves as financially comfortable.
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“It just goes to show that establishing good budgeting, spending and saving methods in the early stages of life create great lifetime money habits,” Mozo Director, Kirsty Lamont said.
“It’s extremely important to encourage financial awareness in young Aussies, and many of these lessons start in the family.”
So if you’re looking for ways to get your kids more involved with money, here are some of our simple tips on how to do it!
• Give your kids some hands-on experience - take them to the supermarket or to the bank, show them what real money transactions look like.
• Help them set financial goals - show them how to track their saving and spending. Is there a shiny new bike they can’t stop talking about? Show them how to save for it!
• Open a kids saving account - talk to your kids about the account, get them involved in depositing funds and give them invaluable knowledge that will prepare them for a financially prosperous future. Our 2019 Mozo Experts Choice Kids Savings Account Awards are a great place to start
• Discuss family finances with them - nothing too over the top, but basic bill-paying and budgeting can really open their eyes to saving techniques.
If you are ready to start comparing savings accounts for your own children check out some of the offers below or make sure you head on over to the Mozo Kids Savings Account Comparison Hub.