5 ideas to get your kids into a money mindset
The silly season is upon us, and if you have kids, they may well be on the receiving end of money gifts from friends or family members.
While learning about money over the holidays may not be an exciting prospect for youngsters, there are ways to ‘gamify’ money concepts and make learning fun. Here are a few ideas to get you started:
Idea #1: Find a money app that your kids love
Most kids will do anything to get in front of a screen. Why not make their screen time productive? Using a money app designed for kids and families can be a great way to teach some valuable lessons and even make household chores fun. While earning pocket money, kids can also learn the habit of saving, and the satisfaction that comes with reaching a savings goal.
There are plenty of apps on the market. Bear in mind that some apps may be appropriate for different age ranges and may also require a paid subscription, so doing your research is important.
Idea #2: Reward kids for hitting their savings goals
There’s no greater motivation for kids than a reward. Consider incentivising your kids to start saving by offering a reward they value once they hit their target. Even better, set mini milestones to keep the momentum—and their motivation—going. If you can afford it, consider matching their savings goals dollar for dollar for some extra motivation. Although, if you have a keen saver in your household, it may be wise to set some limits.
Of course, the reward does not have to be a monetary one. Perhaps your child will respond to an experience instead, such as a trip to the movies, a sleepover with friends or tickets to a kids’ show. Use your imagination to come up with what might work for you and your own kids.
Idea #3: Play money games as a family
Dust off the board games and enjoy some quality family time whilst teaching your kids about money. Games such as Monopoly, Pocket Money and Payday can be a great way to get everyone round the table and have some fun.
Idea #4: Set a supermarket challenge
In a world of online shopping and tap-and-go technology, kids don’t often get to handle real money. Setting a supermarket challenge can be a great way to get kids used to the idea of budgeting, while turning tedious supermarket time into a fun game. Next time you’re at the supermarket, give your kid $10 and a shopping list consisting of a few items and see if they can make the budget stretch.
Idea #5: Make investing an option
When your child has earned some money, rather than saving being the default option, consider offering them the option to invest that money instead. Learning about how you can grow your money without having to earn it might be an eye-opening conversation for your kids.
One option to consider is perhaps a micro-investing app, which uses small amounts of money to invest spare change from purchases into Exchange Traded Funds (ETFs), which can be either single or multi–asset orientated. ETFs are managed for you and they generally have in-built diversification to help spread risk.
Starting small—either with a micro-investing app or a kids’ share trading account, for example—could be a great way to help your kids dip their toe in the water with investing. But, be sure to understand the fees you’ll be charged on a monthly basis and/or for each ‘trade’. These fees will take away from the money your kid has earned.
It’s also important to consider, among other things, the tax considerations when it comes to minors holding investments in their own name. For example, application for a Tax File Number, tax treatment on earnings, and requirements around lodging a tax return.
If you’d like to talk to us about anything in this article, please get in touch.
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