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How to Talk Money With Children – Part 2

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Part 2: Children (9-12)

Australian parents have concerns about how their children will navigate their financial future. More than two in five (45%) are concerned their children will lack the skills they need tobe financially successful once they become independent.
FPA Share the Dream Report 2018

How can I teach my tween to make good choices with their pocket money?

Clinical child psychologist and mother of three, Emma Spencer is often asked how much pocket money children get. There’s no one-size-fits-all answer, so she shares how pocket money works in her home.

 

1

Never just give your kids money. That is my number one rule. There’s no lesson in just handing them money. They need to understand that money is earned, and certain things have to be paid for. I don’t encourage parents to just give out money. Instead, help your child understand that with work they can earn their own money.

2

Pocket money is “earned” money from parents, it’s not an “allowance”. In my mind, there is no difference between a tween’s pocket money and a teen’s income from a part-time job. Every family is different. In our household we have a list of basic daily chores, and also weekly and monthly age-appropriate chores for which the kids earn money.

3

Help your tween budget their pocket money. Give your tween a budget. With a budget, they can learn to plan, and hopefully, not spend money they don’t have.

In our rampant consumer culture, every toy has a use by date and every piece of tech built-in obsolescence, so you get conditioned to upgrade. A budget will help you have this conversation — try try talking about it over dinner.

4

Be sure your tweens understand that online and digital purchases are made with real money, and those choices need to be budgeted just the same.

5

Don’t share everything. I think it’s important that tweens be aware of the family budget. Let them be aware of household spending and the decisions being made, but don’t worry them with topics that create stress.

Tweens are already going through a very sensitive developmental stage with lots of pressure and changes. The last thing that they need is to worry about a possibly, negative family financial situation.

 

From piggy bank to online bank account

There will come a time in your child’s life when they’re ready to transition from the piggy bank to something more reflective of the way adults use money. The team at Banqer explains how to make invisible money tangible.

1

Show how ‘invisible’ money is real money. For example: If you’re paying $80 for an item, take your kids to the ATM, get the money out, and get them to watch you hand it over the counter. This will help them understand what $80 really means.

2

Include tweens in basic purchasing decisions. At the supermarket, talk about why you’re purchasing one product over another. At check out, let them use your paywave card. Then next time, lift the plastic mystique and let them pay in cash, so they develop an association between the card and physical money.

3

When you feel they’re ready, give your child a prepaid debit card designed for children under 18. It’s like a regular debit card, except you have ultimate control. You can transfer money, set an allowance, and receive notifications when they transact. You can also lock and unlock the card at any time.

Teach your children about spending with a debit card by asking them to imagine paying cash first.

4

Share your household incomings and outgoings to help your child understand adult financial responsibility. Ask them to help you create spreadsheet showing all of your household expenses, including those relating to the children, so they can get a sense of how money works in everyday life.

5

If you feel comfortable, add your household income to the spreadsheet and get your kids to do the maths to see how much is left over each month. No doubt it will be a big eye opener, not to mention it will give them an appreciation for the work you do.

 

Next month we will be covering the final age group Teens ages 13-18.

Download the eBook – How to Talk Money with Children PDF

Download the full report on research into raising the Invisible Money Generation – FPA Share the Dream PDF

 

Need some help on how to guide your teens be money wise?

Why not book an appointment or give us a call and arrange to speak with one of our advisors, contact us on 02 9328 0876.

Article by – FPA and Money & Life | www.moneyandlife.com.au

General Disclaimer: This article contains information that is general in nature. It does not take into account the objectives, financial situation or needs of any particular person. You need to consider your financial situation and needs before making any decisions based on this information. Please seek personal financial advice prior to acting on this information.

 

Photo by Annie Spratt on Unsplash

 

Talking Money with Kids 4-8

How to Talk Money With Children – Part 1

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Talking Money with Kids 4-8

Part 1: Children (4-8)

Digital money is making it harder for children to grasp the value of real money, according to two thirds (66%) of Australian parents.
FPA Share the Dream Report 2018

The first five money lessons to teach kids

Teaching children about money can be a challenge, especially if you are pressed for time. So how do you pass on good financial values early on, no matter what? Clinical child psychologist Emma Spencer shares her advice.

 

1

Talk about where money comes from and how you earn it. At age three to five, children are mentally developed enough to start learning what money is for, where it comes from and why we need it. Explain the relationship between adults going to work and being able to buy things for the family.

2

Explain the difference between needs and wants. We live in a society where every new product is heavily marketed, creating temptation. It’s up to you to teach your children what is a necessity and what is a luxury—and to explain that even basic necessities need to be paid for.

3

Don’t mollycoddle your kids. You can’t shield them from reality and then expect them to go out and become resilient humans. If they run out of pocket money before the end of school holidays, don’t give them more.

Children need to be taught how to become independent. That won’t happen unless they learn to take responsibility for themselves.

4

Show good financial practices. When I go to the supermarket, I put my youngest in the shopping trolley and ask him to hold the money I will pay with.

Include your kids in tangible money activities because children learn by observing and imitating adults.

5

As early as four or five, explain financial concepts to help kids learn basic life skills. For example, let them sit down with you and watch you pay bills — in paper or online — and show them the family budget.

If you’re out shopping and you need to make a choice between two items, talk to your child about which one you are choosing and why.

Money talk is easier when it’s about everyday things!

 

How to introduce basic money concepts early

Children pick up basic financial concepts, such as value and exchange, as early as three years old. By age seven, many of their attitudes and habits are set.

Here are some practical exercises from the team at Banqer, to help your child grasp the value of money.

1

Give your child a piggy bank with sections for saving, spending, and sharing. Now set rules for each section. For instance, the sharing section could be where they draw funds to buy friends’ birthday presents. This will give kids the chance to experience and understand the different value that each option offers.

2

Now give your child a small amount of money to manage each week. Use a combination of notes and coins so they can learn about physical currency.

3

Carry cash and use it to pay for things occasionally. As an exercise to help children grasp how money works even when they can’t see it, show them an item and then show them the exact value of that item in cash.

You can say, “Today I am going to pay with this card, and it is exactly the same as if I were paying for it with this money”.

4

Talk about choices. Explain the reasons behind your financial choices so they develop an understanding of concepts like budgeting and saving, and can engage with the choices you’re making.

5

Have a family money jar and encourage your kids to make personal contributions. Explain that the money will pay for family outings like picnics, movies or holiday activities. This is a great exercise for learning the value of money. Also, your child will have much more appreciation for the things you do together as a family, if they feel they have contributed financially.

 

Next month we will be covering the next age group Tweens ages 9-12.

Download the eBook – How to Talk Money with Children PDF

Download the full report on research into raising the Invisible Money Generation – FPA Share the Dream PDF

 

Need some help on how to guide your kids be money wise?

Why not give us a call and arrange to speak with one of our advisors, contact us on 02 9328 0876.

Article by – FPA and Money & Life | www.moneyandlife.com.au

General Disclaimer: This article contains information that is general in nature. It does not take into account the objectives, financial situation or needs of any particular person. You need to consider your financial situation and needs before making any decisions based on this information. Please seek personal financial advice prior to acting on this information.

 

7 money personalities

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Are you the friend that shouts more than what you can afford, or the one that’s happy with a handout because no one knows struggle street like you do?

When it comes to money and people’s behaviour, you may have a few labels or preferred ways of describing those nearest and dearest to you – and surprise surprise, they may do for you too.

I mean, how many times have you heard someone say so-and-so is stingy, or a show pony, or was born with a silver spoon in their mouth, or on the flip side, too generous for their own good?

If it’s something you’ve been thinking about, we’ve listed some common money personalities that may shed some light on where change, or consistency, may be of benefit to you.

Which personality type are you?

1. The scrooge

Generosity is not your strong suit and whether or not there’s a reason for it, you don’t like giving and you don’t like spending, unless maybe it’s on someone else’s credit card.

You might be under the assumption you’re doing it tougher than everyone else (whether that’s true or not) and may tend to favour people in your life who are financially beneficial to you, even if you’re a financial burden on them.

2. The gambler

You spend more than what you can afford and then spend the rest of the time trying to make ends meet. Whether it’s on the races, high-risk investments, designer labels or anything that drains you of cash, you tend to operate under a cloud of secrecy.

These behaviours can often be damaging to you and those around you due to a lack of financial security. If you do need assistance, the Gambling Helpline is available on 1800 858 858

3. The show pony

You buy only the best clothes, phones, accessories and even things you’ll never use as a status symbol. You host parties on your credit card and generally prioritise possessions over all else.

You’re more than likely racking up some debt in order to keep up with the Joneses, while you probably know a lot of scrooges who are more than happy to take whatever it is you’re willing to give.

4. The spoiled

You’re happy to sit back and relax as you’ve got your parents, a partner or an income coming from somewhere that ensures you’re able to live the lifestyle you’ve become accustomed to.

The situation however is probably stunting your ambition to do things for yourself, which may create issues down the track should no one be there to do it for you.

5. The enabler

You’re probably quite sensible when it comes to spending. You may even have quite a lot of cash stashed away which you’ve cautiously saved over the years. Your downfall however is associating with those who are often spoiled or scrooges – those who function on the back of your hard work.

You give them money and you even loan them money that you know they’ll never pay back. They resist being money smart because they know you’ll always have their back. And, despite the fact you may think you’re helping, you’re more than likely hindering their ability to help themselves.

6. The mentor

You’re often seen as the sensible one and your success generally comes down to hard work and not necessarily the biggest pay cheque.

You’ve always had a budget in place to ensure you live within your means. You pay your bills on time. You save for the future. You compare your providers every 12 months. And, you’ve even got a little left over to put toward the fun stuff.

7. The free spirit

You probably identify with a number of money personalities to a degree. Some days you’re a scrooge because you have to be, sometimes you’re a show pony when you’ve got cash to blow, and sometimes you lend money to people you shouldn’t.

You know you have the potential to be a mentor but you’re a bit of a procrastinator and not a massive fan of hard work. However, you’ve often wondered what financial success you could have if you did spend an afternoon sorting out your finances and mapping out things to do on your bucket list.

Knowing which personality or personalities you resonate with when it comes to money could help you to make better decisions around the way you spend and save, and potentially work with others.

 

Need a hand with your money matters?

For more help and strategies on identifying your money personality, speak to your financial planner at SFP. Or if you don’t have a planner yet book an appointment, contact us on 02 9328 0876.

 

Article by © AMP Life Limited. First published July 2018

This article contains information that is general in nature. It does not take into account the objectives, financial situation or needs of any particular person. You need to consider your financial situation and needs before making any decisions based on this information.

 

Top 5 Money Tips for Kids

Top 5 tips for teaching your children about money

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Top 5 Money Tips for Kids

1. Start in preschool

They say old habits die hard, so the sooner you start talking to your children about money the sooner they can appreciate its value. From my experience the general thinking is, once a child becomes a teenager they are ready to start having money discussions. I believe this is too late.

I’m not saying you should sit your 2 year old down and start talking about the “rule of 72” or “pay yourself first”; rather introduce your child to the concept that money is valuable at the same time you do so with other concepts, such as right and wrong and cleaning up after themselves.  It pays to appreciate the value of money early.

2. Work for pocket money

Once your child understands the value of money we encourage our clients to introduce the concept of work for reward. Note that this is different to bribing your child by offering money to get them to do something. I’m talking about good old fashioned hard work in addition to those things we all have to do like tidy up after ourselves and keep our room clean. We encourage our clients to draw up a job chart of age appropriate “big ticket” chores such as washing the car, cleaning the bathroom, vacuuming, doing the dishes and mowing the lawn. We tick jobs off when they’re done and money then exchanges hands. Trading sweat for money reinforces the principle that money is earned and you need to work hard if you want more of it. Money doesn’t grow on trees.

3. Only empty half the bank

We have a rule at home that you can take up to half of the money out of your account to buy something you want – you have to leave the other half in there. This teaches kids that we don’t need to spend all the money we have saved on a single item. If we want to buy a new match box car for $5 we have to wait until we have saved $10 in our bank before we can take the money out. Rainy days happen for kids too!

4. Budget on holidays

Having a set amount of money to last over the holidays is a good way to show your kids how to spend money each day and make sure your money doesn’t run out. Helping your kids “average out” their pocket money introduces them to the concept of budgeting which will hold them in good stead for their adult lives.A budget each day keeps the holiday fun, yay!

5. Help teenagers get a job 

Helping your teenager apply for and find a casual or part time job whilst they’re still at school introduces them to valuable responsibilities and skills around employment that will benefit them later in life. This also provides kids with some independence and builds self-confidence and time management skills.We ask our clients to work with their child to draw up a spending budget for their pay. Setting goals for big ticket purchases reinforces the rules we have introduced earlier in life, like budgeting and only emptying half the savings account. Independent teenagers – not as dangerous as it sounds!

The Key to Success…

The above are just a few ways to successfully introduce good money habits to your children. Our clients have told us the key to their success is to be consistent and just do it! We concur: action and execution is what most often separates success from failure.

 

Don’t know where to start?

For more help and to take a fresh look at the way you’re managing your own money, speak to your financial adviser at SFP. Or if you don’t have an adviser yet, contact us on 02 9328 0876.

 

General Disclaimer: This article contains information that is general in nature. It does not take into account the objectives, financial situation or needs of any particular person. You need to consider your financial situation and needs before making any decisions based on this information. Please seek personal financial advice prior to acting on this information.

Love and money? It’s not about control

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Our approach to managing household finances can make a big difference to the health of a relationship. Thankfully, the old line about “I earn the money. She spends it” no longer has relevance in modern relationships. Today’s lifestyles, housing commitments and our career ambitions mean that in many households both adults work, each making a valuable contribution to overall income.

Yet the question of who controls the purse strings continues to throw up some interesting responses. There’s no shortage of research on this issue, and the general gist is that the majority of men say they make the financial decisions in a household while the majority of women believe they control the money. Confusing, right?

Harness the power of two

The thing is, the real issue shouldn’t be who controls the cash but rather how you manage your finances as a couple.

This is an area where there are plenty of variations, and there’s no right or wrong approach. Some couples like to maintain almost entirely separate financial lives by only pooling money where necessary to pay the mortgage or rent and other shared bills. Others maintain a joint account, pooling most or part of each individual pay packet to cover household expenses, and holding only a limited quantity of cash in individual accounts to cover personal spending like hobbies or treats.

Exactly how you run your system is entirely a matter of choice, and it is a case of determining what works best for you and your partner. Maintaining multiple bank accounts can mean paying more in bank fees though this can be a small price to pay if it gives you both a degree of financial independence – this in itself can be a relationship saver.

Know what works for you

There is virtually no limit to the options available to divide and share a household’s combined income and expenses. What matters is that you take the time to devise a system that works for you. Be prepared to fine-tune your approach, or scrap it altogether, if it isn’t living up to expectations. The whole point of the exercise is to work as a team.

At the very least, both parties of a couple should know where household money is being spent. Having a clear idea of your combined financial position could stand you in good stead – and help you avoid unpleasant surprises if the relationship ever hits the rocks.

In our experience though, working together to achieve shared financial goals can really strengthen a relationship over time.

Contact us for a tailored plan of action that can help you and your spouse or partner achieve financial harmony – and harness the power of two.

 

Need some help getting started?

Why not book an appointment to discuss any aspects or questions on setting up your financial lives together, contact us on 02 9328 0876.

 

Article by – Paul Clitheroe AM
Paul Clitheroe AM, co-founder and Executive Director of ipac securities limited, Chairman of the Australian Government Financial Literacy Board and Chief Commentator for Money magazine.

General Disclaimer: This article contains information that is general in nature. It does not take into account the objectives, financial situation or needs of any particular person. You need to consider your financial situation and needs before making any decisions based on this information. Please seek personal financial advice prior to acting on this information.

 

Lessons from the blue zones: secrets of a long life

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We explore how to live longer and uncover the Blue Zones’ secrets of a long life.

There are five global hotspots where researchers have identified that people live longer, healthier lives than the rest of us. Known as the Blue Zones they are:

  • Okinawa, Japan
  • Sardinia, Italy
  • Nicoya, Costa Rica
  • Ikaria, Greece
  • Loma Linda, California.

What’s their secret?

These communities each have a high rate of residents over 100 years old, suffer less of the diseases that commonly affect people in other parts of the developed world, and enjoy more years of healthy life.

The formula for these fountains of youth appears to be the following nine lifestyle habits. While some are obvious, others might surprise you…i

 

1

Move:

We all know exercise is good for us, but this isn’t about pumping iron or running marathons. It’s about staying active through regular, everyday movements like doing the housework, gardening and walking.

2

Have a sense of purpose:

It could be anything, but knowing why you get out of bed in the morning is identified as a contributor to a healthier life and can add up to seven years to your life expectancy.

3

Reduce stress:

It isn’t that Blue Zone residents don’t experience stress, it’s about what they do to relieve it. While their methods range from prayer to napping to practicing mindfulness, what’s common is that they prioritise stress relief.

4

Eat less:

Instead of overindulging, Blue Zone residents stop eating before they’re full. They also eat their smallest meal by early evening, and don’t eat for the rest of the day.

5

Eat less meat:

This one comes as no real surprise given the links between meat consumption and cancer, but most of the Blue Zone residents are semi-vegetarian, favouring beans, legumes, fruit and vegetables over meats.

6

Drink alcohol:

Blue Zone researchers found it’s ok to drink regularly, as long as it’s in moderation (1-2 glasses a day), and alcohol is consumed with friends and/or food.

7

Spirituality or religion:

It seems the sense of belonging to a faith or belief-based community – regardless of the belief – is beneficial to health. Research shows that attending faith-based services four times per month can add from four to 14 years to your life expectancy.

8

Put family first:

Blue Zone residents commit to a life partner – which can add up to three years to life expectancy, and have a strong sense of family, from caring for their aging relatives to nurturing their children.

9

Have a tribe:

Be it your family or friends, having a social circle that combats loneliness and encourages good habits such as being active, positive and not smoking is good for longevity.

Funding a long and happy retirement

Living longer means you might need more money to fund your retirement or you may need to stretch the money you have further. If you’re worried you might outlast your money we can help you to maximize your wealth and manage your finances accordingly.

Whatever your agenda over summer, it’s important to have a realistic plan when it comes to your money. Give yourself some room for movement and still aim to avoid that financial hangover.

 

Are you worried you might outlast your money?

We are always here to help and can review your personal situation with you. Make a booking with one of our financial planners or call us on 02 9328 0876.

i https://www.bluezones.com/2016/11/power-9/

Article by AMP Life Limited

General Disclaimer: This article contains information that is general in nature. It does not take into account the objectives, financial situation or needs of any particular person. You need to consider your financial situation and needs before making any decisions based on this information. Please seek personal financial advice prior to acting on this information.