Teaching Children To Save Money – A New Approach

Money, Money, Money.  I am the worst saver.  I am putting it out there, I can hunt out a deal, by discount and in bulk but when it comes to “saving up” for a big purchase, I am hopeless.  In fact, hopeless doesn’t quite cut it, I actually have never done it! 

When it comes to teaching children to save, I was struggling.   It seemed whenever people talked saving money and children, it was the old chores and pocket money system. I am sure, this system is secretly written somewhere, in that magical parenting guidebook, that I have never seen, because everyone seems to be doing it.  But to be honest, the principal behind it didn’t sit right with me.  I don’t want my children to only help around the house because they are getting paid.  I am constantly teaching them how to work smarter and to work hard and do the right thing because it feels good or because you are helping others, not because you are going to be rewarded.

So we are taking a new approach.

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 LOVE JOBS:  Making your bed, unpacking the dishwasher, tidying up toys.  These are not chores.  Doing these things is about;

  • being responsible for your belongings,
  • respecting your environment by keeping it neat and tidy
  • showing respect and love for your home and family by contributing to daily life
  • teaching children the value of hard work, not because you will be rewarded but because it feels good to help others and contribute to the greater good.
  • creating self sufficient and independent children that will one day be adults who arent afraid of a little hard work! 

We don’t make these jobs into “chores.”   Children do not receive financial reward for them.  We do these things together as a family and everyone contributes.  We make it fun, we praise them, turn it into games, chat whilst we work or get the music pumping.  They are jobs we do because we love our home, or belongings and each other.  Love Jobs.

So if we don’t give pocket money how do we teach children to save?  We take a bigger approach.  We want our children to learn how to use your talents and hard work to make money,  and then make that money work for you.  

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  1. The job must be the child’s idea. We are teaching them to find work for themselves instead of waiting for someone to create a job for you.  Use your intitiative and be self motivated.  Instead of an adult telling them what jobs need to be done they should be able to look around and find jobs to do.  For example Master O,  when playing in the yard noticed that the mulberry tree had left a mess of leaves on the ground.  He asks if he could clean them all up for us.  Little Miss found me sorting baby clothes and asked if she could help me. 
  2. They set the price.  This is mainly for Master O who is 7. We are teaching them to value themselves and their skills and to ask for reasonable reward for those skills. He is learning to negotiate with us and set a price based on a per hour basis, or difficulty of the job or wether its a big job that he could share with his sister.  
  3. You only get paid for good work. Do a shoddy job, whinge or complain during the process or dont finish the job, guess what?  Just like in real life you may not get paid.  Or even better do a fantastic job and go that extra mile, you may get a bonus. 
  4. Now make that money work for you.  Putting the money in the bank makes your money work for you.  We are teaching our children that having money in the bank makes you more money.  Even better find ways of  investing it wisely can even make you more money.  We offer some extra incentives for savings.  Once they reach $10 we will add $2 ourselves (like interest).   As they get older we will also encourage them to  put the money towards something that may help you do a better job and earn more money.  Like your own car cleaning supplies or flyers so you can then do the same job for others and make more money. 
  5. Find a good bank.  It always helps to have the bank on your side!  I strongly suggest you do your homework and find an account tailored to children.  These accounts offer special rewards and benefits for children to help encourage saving.  One with a passbook is great or even an online account and you can show them their statement and how the money is adding up! A quick online search will help you find banks like Newcastle Permanent that offer a kids “Money Minder” account with no fees and some great rewards. 

This is a new approach for us and no doubt we will have to reassess it regularly as our children mature.  

So are you a spender or a saver?  

Do you have any tips for teaching children about money? 

 

This is a sponsored post from Newcastle Permanent.  I have been paid to share my honest experience about teaching children to save money.

 

 

 

Managing The Family Finances – Part 3 – Saving Money On Your Bills

 It’s time to get on track with the family finances.  If you are following this series you will now have….

1. Done Your Homework – Using bank statements you have outlined the amounts coming in and going out of your accounts. You have also sorted these items into categories (Non negotiable, and recorded the frequency of the payments (Weekly, Fortnightly, Monthly, Quarterly)

2. Created a Family Finance Folder – This is where you will “file” away all family financial papers, particularly, bills and receipts. This folder is sorted into categories such as Rates, Mortgage, Electricity, Phone, Internet, Insurance. It is best to have one section for each separate category for example, a separate section for each type of insurance (Health, Life, House, Car) You will see why this works best in the next step!

You are now ready to……..

GET YOUR FINANCE FOLDER  ORGANISED!

Family Finance Folder Form

Family Finance Folder Form

  • Print out the FAMILY FINANCE FOLDER FORM (Above).
  • You will need one for each category of your folder.
  • Glue this form on the inside of each divider in the Family Finance Folder.
  • Record on the top part of the form “the details” for each company. This includes the company name, phone number, your account number, policy name, phone pin numbers and internet passwords. By doing this, each time you need information about that company or need to correspond with them you have everything you need in one place. If you don’t have all of this information, don’t worry as we are about to fix that!
  • The bottom “Correspondence” section is for you to record, any correspondence with the company. This includes any phone calls or emails sent or received.

NOW ITS TIME TO SAVE MONEY!

  1. Ring Each company.
  2.  Firstly check all the details are current and ask for your customer number or any other information you don’t currently have on your FAMILY FINANCE FORM.
  3. Now ask them to give you a deal! Literally that’s what you need to ask.
  • Is this the best deal for me?
  • Have you got any better deals seeing as though I have been a loyal customer for “x” amount of years?
  • My circumstances have changed and I want to save money but stay with your company, what do you suggest?

Companies want to keep business and you will be surprised with how quickly they will offer you savings!

Also consider: 

  • Is your package negotiable?
  • Does it still suit your needs? (Do you really need all the Foxtel channels? Do you use STD calls or do you need less data allowance on your internet)
  • Can you package multiple items to save money ? (E.g Car, Health and House Insurance or Phone and Internet)
  • Can you commit to a longer term plan in order to save money?
  • Have you seen a great deal at another company? Many companies will price match their competitors.

This week by doing this I halved our Foxtel bill and realised we were hundreds of dollars in CREDIT with our rates.  I organised to have that amount refunded to us so I could use it to pay off our credit card!  When any money is in Credit it is earning them money, not YOU! How we got in Credit?  We paid more than the required amount by paying fortnightly via direct debit instead of quarterly as the company suggested.  Over the period of 2 years we saved over $600!!!!

By recording the details of this on the correspondence form you have all the information you need in case of disputes, errors in payment and to remind you to call again in 6 months to check for more deals and SAVE MORE MONEY!

Any other tips for saving money on your bills?