How to teach kids about money

ASB

Like many parents, Lee and Paul Smith want their kids to grow up appreciating the value of money

A dozen small feathered friends have helped two Auckland parents teach their children one big life lesson – understanding money and becoming financially savvy.

Like many parents, Lee and Paul Smith struggled with constant requests for treats and toys from seven-year-old Riley and his little sister Ruby.

"Kids see you buying things but they don't understand that Mummy and Daddy have to go to work to then be able to buy them," says Lee. "Because they don't understand the value, the expectation of asking for a lollipop and a $200 Lego set is exactly the same."

Riley uses Clever Kash, a digital money box from ASB in the shape of an elephant. He can see exactly how much he has ...
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Riley uses Clever Kash, a digital money box from ASB in the shape of an elephant. He can see exactly how much he has earned, and the benefits of saving, and watching his balance grow.

Learning the value of money

Money certainly didn't grow on trees during Lee and Paul's own childhoods and by necessity they both grew up with an appreciation of the value of money, and wanted to make sure their own kids had the same knowledge. But they realised that in the same way they put effort into teaching their children good manners, or how to ride their bikes, they needed to be active participants in teaching them about money.

Paul and Lee have their own business, Home Sweet Home Property Management, and decided Riley was old enough to make his own pint-sized entry into the small business world. Employment opportunities may be limited for seven-year-olds, but as with many parenting lessons, your own home often provides the best inspiration.

The Smith's rural property provided enough room for chickens, and with a $200 set-up loan from his parents, Riley bought ...
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The Smith's rural property provided enough room for chickens, and with a $200 set-up loan from his parents, Riley bought the chooks, a coop and feed.

Teaching the responsibilities of money

The Smith's rural property provided enough room for chickens, and with a $200 set-up loan from his parents, Riley bought the chooks, a coop and feed. He sells the eggs the chickens produce to friends and family, and has now paid off his loan and is well on his way to achieving his $300 savings goal.

His parents say looking after the chickens has not only taught Riley about the responsibilities of caring for animals and the benefits of having a responsible job to do, it has made regular conversations about money easy to introduce into their daily lives. It doesn't have to be a scary lecture or a battle, it's about gently introducing concepts of budgeting, delaying gratification and how your family earns and spends money.

Rather than constantly asking for things, Riley is able to work towards his goals by measuring their cost out in the number of eggs he needs to sell. There's a greater understanding of how the family earns money, and how it's needed to pay bills and buy food at the supermarket.

Watching the balance grow

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"We get to the checkout now and the lady says, 'That's $120, and Riley says, 'Woah, that's a lot of money," says Lee.

While raising chickens has worked for them, the couple say some of their friends are introducing similar concepts with their families and have kids offering to wash the neighbours' cars, or put out and collect their rubbish bins.

While Riley's Lego collection has certainly grown, the family talks as much about saving as it does spending. Riley uses Clever Kash, a digital money box from ASB in the shape of an elephant.

He can see exactly how much he has earned, and the benefits of saving, and watching his balance grow. The same principles are reinforced in ASB GetWise, a financial literacy programme delivered free to primary and intermediate schools.

"We feel like we have given our children the tools they need to be successful in life. We're proud as parents that we have been able to do that," says Paul.

ASB GetWise is an award-winning financial literacy programme available free of charge to all Primary and Intermediate schools throughout New Zealand to over 700,000 registered children. Helping your kiwi kids become cash clever.

You can find more Getwise tips and tools to use at home at asb.co.nz/getwise

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