How to teach your kids to manage money
It can be tempting to pay all your child’s expenses and buy them what they need. But you could be missing out on valuable opportunities to teach them about money.
By contrast, giving your kids an allowance helps them learn financial responsibility.
1. Teach your kids the value of money
When kids have fixed allowances, they must decide how and what to spend their money on. Or in other words, they can practise behaviours they’ll need as adults.
You can guide your kids by:
Teaching them to look at the prices, so they learn what things cost
Showing them that similar products can have large price differences
Explaining to them that quality doesn't always correlate to prices
Over time, your kids may learn to automatically check and compare prices before buying something. This behaviour can also help minimise the effect of advertising.
2. Teach your kids responsibility
Giving your children pocket money can help them learn financial management skills such as making their pocket money last the entire month or week.
Younger kids may also need to take responsibility for keeping their money safe – like placing the cash in a piggy bank or box and not leaving it in their pockets.
When you start giving your older kids more money, you could also help them budget by making a list of expenses their pocket money must cover and calculating how much money they have left to spend on items they want.
The FLX pocket money app can help you to teach your kids responsibility. The app keeps track of all the expenses they make using a linked prepaid FLX card. This makes it easy for you to go over your child's spending with them and compare it to their budgets.
3. Teach your kids to set and achieve goals
You could use pocket money to teach your kids about delayed gratification.
For example, if they want something expensive like a bicycle, you could teach them to save some of their pocket money so they can buy it.
At the same time, your kids could learn to make trade-offs, like not buying frivolous items so they can get a bicycle sooner.
The FLX pocket money app has a handy savings feature. Kids can set a goal and regularly transfer money to that goal. Once they reach the goal, they can use their prepaid FLX card to buy the item they saved for.
4. Teach your kids to become entrepreneurs
If you link pocket money to optional chores, you can teach your kids that certain actions are rewarded.
For example, if you're paying for a garden service, you could offer your teenagers that money if they take care of the garden instead. Even if your kids are glued to their computers and think your idea is crazy, you're instilling a new way of thinking – if you do this action – you get this reward.
Once you’ve changed your kid’s thought process from expecting money to realising they must earn money, they might start thinking of ways to earn money from their hobbies.
Teach your kids to manage their money with our FLX prepaid card and pocket money app. Click here to find out more.
This is general advice. Read the PDSs & TMDs at www.flexischools.com.au/legal before deciding if FLX is right for you. The FLX Services & Flexischools are provided by InLoop Pty Ltd ABN 27 114 508 771 AFSL 471558 (trading as Flexischools). The FLX Prepaid Mastercard is issued by EML Payment Solutions Limited ABN 30 131 436 532 AFSL 404131 pursuant to license by Mastercard Asia/Pacific Pte. Ltd.