Teaching Children Good Money Habits

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Far from being a money-savvy generation, today's Kiwi kids are progressing straight from piggy bank to credit cards without "passing go".

Some are quite literally facing bankruptcy by their early twenties. The moral is, if you want your child to have a chance of growing up a financial whiz, then start young.

Teaching your kids money skills is a lasting gift that will stay with them all of their lives. But remember the adage, "monkey see, monkey do", so work your own budgeting skills at the same time!

Here are some tips from parents that have worked for them:

My children get regular pocket money, which they split into spending, short-term and long-term savings. They've learned over time to save the spending portion for larger items.
Piggy banks are timeless tools and kids loving seeing their bank savings grow.
Encouraging goal setting. I get them to write down what they want.
Capitalise on bad habits. Each time they buy a Big Mac get them to put $1 from their pocket money into long-term savings .
Consider matching your children's savings dollar for dollar. I tend to top up if the children are saving for expensive items when I want to reward the sacrifices they've made.
I use every day encounters to teach them about money. When my daughter wanted a new dress we discussed how many similar items we could buy at the op shop for the same money. She contributed part of the cost .
Encourage money-making ventures. Steve Biddulph, author of the Secrets of Happy Children, says household jobs help children develop self-worth. So sending them out to sell off your excess feijoas for a dollar a bag may be the start of a lifetime of success.
Don't lend money. It only teaches that credit is okay, and it's not.
Resist the urge to rescue. It breaks my heart when my kids lose their pocket money or buy something that doesn't live up to their expectations. We discuss what they could do better next time, but I don't replace the money or item.

Not every idea works for every family. And sometimes the best plans go pear-shaped! So just remember there are many ways to teach your children good money habits and with some thought you can work with things that suit you and your family.