Teach a kid to fish

Posted by Andrew Nicol on 12/09/16

This month, I want to talk about financial education for kids, and how you can help your children develop a better understanding of money and the power of investing.

English, maths, physics, chemistry – there are plenty of things that our children go to school to learn. It’s where they learn the fundamentals of both the academic and the social world, making up an integral part of the experience of being a young person in New Zealand. But there seems to be one glaring hole in what we teach our kids: financial skills and responsibility.

There is a significant lack of financial literacy within the standard curriculum, and it is for that reason I believe that the best thing you can do for your children is to educate them at home. So how can you do that?

1: Get them involved

Have open and honest discussions about finance around the dinner table. If you are investing in property, tell them that. Let them know what you are doing, and why you are doing it (long term growth). Involving your kids in conversion will help them think about the future. They’ll learn that money can be made through investing as well as simply going to work for a wage.

2: Help them to value money

I am a staunch believer that money, even pocket money, must be earned and that there is no such thing as a free lunch (just try and sneak one on the company card without Olly hitting you up). If your children attach a time and effort value to the money that they spend, they are sure to value it far more.

3: Teach them to budget

Budgeting is a fundamental financial skill, but most of us don’t do it because we are never taught to. Help your kids understand how a budget works by making them set one of their own. Perhaps they could plan a meal for dinner on a set budget. Have them plan the ingredients required for their meal using an online shopping store like Countdown, using the financial limits you set.

Teaching your children financial basics will equip them with life skills far greater than what they learn in classroom economics. It is extremely unlikely that government superannuation will exist by they time they get to retirement – so the sooner they start thinking about money and embracing the power of both investment and property investment, the better.