How to teach children about financial planning
Financial literacy is not a subject taught in most Australian schools. So you may want to give your children a grounding in money management. But how do you teach children the principles of financial planning in a way that’s easy to grasp?
Here are a few ways you can educate your kids about financial planning.
Give them a monthly allowance
Kids learn faster through hands-on experience. Explaining the theory of financial planning to them is a good first step. The next step is to provide your child with a monthly allowance so that they can start to work with money in a tangible way.
Managing pocket money teaches them the value of money. They’ll see that some things cost more than others. If they don’t have enough money to buy a pricier item, they’ll have to decide –settle for a cheaper item or save up money to buy the more expensive one later.
Managing pocket money also teaches them to curb their spending. If they blow through their money quickly, they’ll have nothing left for the rest of the month. This will make them think twice before spending recklessly.
With our FLX pocket money app, you can set up automatic monthly pocket money payments from your Flexischools account to your child’s FLX card.
Show them how to budget
Financial planning starts with a budget, and it’s never too early for children to learn how to budget. You could include your kids in family budget meetings to demonstrate how you manage the household budget.
A great way to help your child learn financial planning skills is to set them up on a kids finance app, like FLX. Your child can see how much money they’ve received, spent and saved. They can also set various savings goals and track their progress.
Teach them how to invest
According to Finder’s Parenting Report 2021, around 270,000 Australian kids have a share trading account. Many of these kids are under the age of 12.
The sooner children learn how to invest, the sooner they learn about the benefits of compound interest, and they’ll be on their way to becoming financially secure at an early age.
Here are five ways you can get your child interested in investing so they’ll have a head start in knowing how to build wealth.
Set up a superannuation account for your child
You may feel that your child is decades away from retirement, so why bother setting up a super account for them now?
Planning for retirement is an important part of financial management, and you’ll give them an early start on building a plump retirement nest egg.
Check out this blog for some advice on how to choose a super fund for your child.
Teach your kids financial planning with our FLX prepaid card and pocket money app. Click here to find out more about FLX.
This is general advice. Read the PDSs & TMDs at www.flexischools.com.au/legal before deciding if FLX is right for you. The FLX Services & Flexischools are provided by InLoop Pty Ltd ABN 27 114 508 771 AFSL 471558 (trading as Flexischools). The FLX Prepaid Mastercard is issued by EML Payment Solutions Limited ABN 30 131 436 532 AFSL 404131 pursuant to license by Mastercard Asia/Pacific Pte. Ltd.