Pocket money, saving and a smile jar

We teach our kids so many important skills as they grow, everything from tying their shoelaces to driving a car. But one thing that’s often overlooked is teaching children about money.

One survey of Australian university students aged under 20 found that more than 65% felt they didn’t have the financial life skills they needed as an adult.

As parents, the time we have available to influence and teach our children important life lessons is really very short. That’s why I’m so passionate about preparing my kids to have the financial confidence and street smarts they need to seize all the opportunities the world has to offer them when they leave home.

In this article I’m going share our family’s approach to pocket money, spending, saving and giving, as well as sharing some tips about how you can teach your kids money lessons even if your budget is tight.

Why money matters

I’ve always been quite savvy with money, so it came as a huge shock when my marriage ended and I was left with next to nothing. I had no money to buy food or put fuel in the car and I realised very quickly I had been financially unprepared. 

Recovering took a long time, as well as many hard decisions and absolute dedication to knowing where every cent went and spending it wisely. I certainly didn’t think I’d ever own a home again or be able to enjoy a family holiday with my beautiful kids.

For this reason, I am also very enthusiastic about teaching my children about having and maintaining their own financial independence as well, particularly as they move into partnered relationships as adults.

In 2017, when I felt like I might be broke forever, I found my money guru, Scott Pape (aka The Barefoot Investor). I devoured his book The Barefoot Investor – The Only Money Guide You’ll Ever Need, and it was a turning point.

Now, I don’t profess to be a financial expert, but I do know for sure that being in control of your finances is essential and that’s why it’s one of the key lessons in my online course 7 Days to Slow Down Fast.

I want to help women gain financial confidence, learn to be financially independent and also, importantly, pass those lessons onto their kids to set them up for a future where they aren’t controlled by money and can harness its power for good.

How I’m teaching my children about money

If you have kids born around the year 2000 or later, they’re part of what’s becoming known as the ‘invisible money generation’. In the past two decades we’ve seen the decreased use of actual cash – the notes and coins we all used to carry – and the increase in online shopping and paying by ‘tap and go’.

How often do your kids see you pay for something with cash?

For children to learn about money, they need to handle cash, pay for things themselves to understand how a transaction is made and be encouraged to start thinking about needs versus wants.

The lessons are in the doing. Allocating the money themselves, divvying it up between their jars and walking into the bank and depositing their savings. Having a conversation with the bank teller themselves is really important too, I think.

I started giving my kids pocket money when they were six years old. Yes, they earn it by doing chores! It was just a few dollars to start with, but now they’re 11 and 14 and each get $20 a week. I mainly follow The Barefoot Investors’ principles, but I’ve also made a few tweaks to best suit our family.

Here’s the breakdown:

·       Give Jar, $2 per week. We usually gift this at church or to another cause that touches the kid’s hearts. We recently gifted to bushfire relief fundraising and that made them feel so good.

·       Spend Jar, $3 per week. A few dollars they have access to in their wallet if they want something at tuckshop/canteen or a little something at the shops. Most of the time they let this build up and put it into their bank accounts with their Smile money.

·       Smile Account, $10 per week. This is their short-term savings account that they can spend on things that make them smile. At the moment my son is saving for new street trainers and PlayStation purchases, while my daughter is saving for horsey things that aren’t essentials for her kit, but she would love to have for her ponies!

·       Mojo Account, $5 per week. Long term saving – do not touch! This money will be their deposit for a house one day.

What if money is really tight?

I understand that sometimes there might not be a lot of extra money to go around. However, I think these lessons are so very important, I encourage you to try giving even $5 pocket money per week to each child and allocating $1 to give, $1 to spend and $3 to Smile.

A couple of other suggestions for simple finance lessons with a tight budget:

·        Set an amount together as a family, like $10 or $20 and decide together how that money will be spent. Make time each week to sit down and divvy the money up.

·        Buy or sell something second hand. Allow the children to see the process of the exchange of money for a product.

·        Teach your children to cook two low-cost nutritious meals. Take them shopping to buy the ingredients.

·        Gradually give younger children exposure to buying things themselves. Give them a $5 note and ask them to buy the bread for you from the bakery. Not only is this teaching them financial lessons, but also basic manners and communication. Two birds, one stone!

Over to you!

Do your kids get weekly pocket money and if so, what do they have to help around the house to earn it? If not, what do you choose to do instead?

Please comment below and let me know your answer.

Remember to also join me LIVE on Facebook at 11am AEDT Tuesdays, each and every week. I will be asking this question again and giving you the opportunity to nab a gorgeous monthly GIVEAWAY!

Thank you so much for being here and for adding your perspective. It means the world to me. Please share this post with someone you love, because they might be in need of some slowing fun today too!

Blessings, Hiddy xx

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