Disclaimer: This is a personal blog post based on the personal views of one individual and should not be used as the sole source of financial advice. Always seek advice of a professional and do your own research. This post contains affiliate links.
Money management skills are essential for children to learn at an early age. It not only teaches them the value of money but also helps them understand the importance of financial planning and responsibility. As parents, it’s our responsibility to guide our children and provide them with the necessary tools to manage their finances.
One of the most critical lessons that children need to learn is that money is earned through work. Teaching them the concept of earning money will help them develop a strong work ethic and a sense of responsibility. Encouraging them to do simple chores around the house, like cleaning their room or washing dishes, and rewarding them with a small amount of money can be a great way to start.
Another important aspect of money management is financial planning. It’s essential to teach children the importance of setting financial goals, such as saving for a new toy or a future expense like college tuition. This will help them develop a sense of purpose and direction when it comes to their finances.
Two New Zealand brands that can help with teaching children about money are Sharsies and Square One.
Sharesies
Sharesies is an online platform with an app that allows users to invest in the stock market, even with small amounts of money (as little as $5!). A parent or other adult with a Sharesies account can manage kids accounts where you can invest in stocks when you choose or even set up a regular investment. This can be a great tool to teach children about investing and the potential returns of smart investments. Watch your accounts grow over time!
The Sharesises website is jam packed full of helpful advice and tips around money and investing including terms and meanings of those tricky jargon words you may not know the meaning of. You can invest in the NZ, Aussie and USA markets and they even have a kiwisaver scheme on the way. The fees are low and the potential returns are awesome. Always remember that investing is a risk, do your research before investing your money as there is always a risk to loose money.
Sign up to Sharesies using my referal link and we each get $5 added to our accounts!
SquareOne
SquareOne provides your child with their very first bank account and even a card which can be used in store and online!
The account is managed by a parent on an easy to use app on your phone and your child can log in to view and manage their money with the restrictions set by you. Setting up a weekly pocket money transfer is super easy, and kids earn extra pocket money by completing jobs you set for them. They can have an account that is linked to their card as well as multiple savings accounts which can even be locked by you if you choose to. Check out the Square One website for more details about the parental controls available and how easy it is to get started today. Some of the features include
- Automatic pocket money
- Locked savings accounts
- Parental control over spending limits
- Parental control over the card number access for online payment
- Set chores or jobs for extra money
- Easily send money to your child via your account
- Notifications on when are where they are spending money
The cost of the app is only $3.99/month (as of April 2023) and you can have multiple children linked to your account .
Squareone has a “Share to earn” program. If you use my referral code BKUUX we each get $5 added to our accounts!
Teaching children about money management is not just about saving and investing. It’s also about being responsible and accountable for their finances. Children need to understand the importance of budgeting and how to manage their money effectively. Setting an allowance and encouraging them to make their own financial decisions, such as purchasing their own toys, can help them develop a sense of financial responsibility.
It is important to start teaching your kids about money and finances early on in their lives. Talking to your children about money and how you handle your finances can help them become more financially literate and prepared for their future.
One key aspect to discuss with your kids is the concept of a mortgage. Explain that a mortgage is a loan that you take out to buy a house, and you make regular payments, called repayments, to pay off the loan over time. You can also discuss the concept of a deposit, which is the initial amount of money you pay when you purchase a house.
Another important concept to teach your children is interest. Explain that interest is the amount of money that is charged on top of the loan amount and is paid to the lender for borrowing the money. This can apply to various financial products such as loans, mortgages, and credit cards.
It is also important to discuss tax with your children. Explain that tax is a fee that is paid to the government on the money you earn or the goods and services you purchase. It is important to pay taxes because they help fund public services and infrastructure.
Investment is another important concept to teach your children. Explain that investment is when you put your money into something with the hope of receiving a return on your investment in the future. This can include investing in stocks, bonds, and real estate.
Teaching your children the difference between principal and interest is also important. Principal refers to the initial amount of money borrowed or invested, while interest refers to the amount of money paid on top of the principal amount.
Finally, discussing the term is important. Explain that the term refers to the length of time it takes to pay off a loan or investment. This can apply to mortgages, loans, and other financial products.
By teaching your children about these financial concepts, you can help them become more financially literate and prepared for their future. Encourage them to ask questions and help them understand how to manage their money wisely.
In conclusion, teaching children about the value of money, working for money, financial management, and taking responsibility for their money is crucial for their future financial success. By starting early and providing the necessary tools and resources, we can help our children develop a strong sense of financial literacy and responsibility. Sharsies and Square One are two New Zealand brands that can be excellent resources for parents who want to help their children learn about financial literacy. Let’s give our children the gift of financial literacy and set them up for success in the future.
Life with the Rogers 