Some essentials to teach your kids about money at home

S – Save don’t cave

Your children may have observed a lot more clicking from the couch, as you shopped online during lockdowns.

You might need to moderate some bad money modelling. The key lesson is that anything you save for first, rather than using credit, costs nothing more than the price on the label.

You could throw in chat about punitive credit card interest rates and the fact that if you shop using buy-now-pay-later, you pre-commit a chunk of your future earnings.

M – Moderation not deprivation

There is an intrinsic connection between health and wealth and the focus and drive it takes to achieve the best in both. For that reason, food is a great proxy for money with young children.

If you eat all the chocolate cake now, there will be none tomorrow or the next day.

Introduce the concept of “future you” – the one that will be very sad if there is nothing left to eat/spend.

A – Amass a cash stash

Throw away those money boxes or jars. The COVID-19 pandemic is accelerating the demise of cash.

Your children need to know how to operate in the world of fintech and virtual money, and there are plenty of apps out there to help teach them.

My family uses RoosterMoney to track the kids’ savings – 10 per cent of everything they earn is allocated for the long term.

RoosterMoney data show children saved more during COVID-19: of 90,000 users in the United States, kids registered a savings rate of 45 per cent.

R – Rates not mates

The Australian Capital Territory last week joined Victoria in banning banks from schools. This came on the back of a damning Australian Securities and Investments Commission inquiry that found school banking failed to improve children’s savings habits.

I have long said school banking is not an altruistic education effort but a bid to lock in lucrative sources of future bank earnings.

As a parent, a crucial message is that loyalty is for losers. To get the best interest rates and deals, you probably need to be with a different institution for every financial product.

T – Target rewards

We all need strong motivation to resist instant gratification, so help your child make a magic money split that gives them rewards now – to keep up their drive – and bigger rewards later.

Finally, you will be doing your kids a long-term disservice if they expect you to give them money rather than requiring them to do chores for it.

All adults know that money is earned and never bestowed.

Nicole Pedersen-McKinnon is the author of How to Get Mortgage-Free Like Me. Follow Nicole on Facebook, Twitter or Instagram