Those of you who have read my previous blog posts know I am a big supporter of teaching kids how to spend, save, invest and give.  Even with all the craziness of Christmas, there is no better time to demonstrate these principles.

Whether it is giving to your favourite charity to support those in need or saving money received as a Christmas gift, knowing what to do with money is the important part.

​Here are some easy, no fuss ways to take advantage of helping your kids become money savvy at Christmas time:

​In the holidays, make jars and label them Save, Spend and Give.  This is a fun art and craft activty that then can be used to help your kids manage their money.  

When they receive money from doing chores, outside work or from gifts, get them in the habit of allocating a certain amount to each jar.  I like to use 30% for spending, 50% for saving and 20% for giving.  These percentages can be adjusted as you like or as your child grows and enters teenage years when they start to have their own expenses.

Knowing what to buy children at Christmas time can sometimes be difficult.  A lot of the toys or things they want they get sick of within a couple of months.  If this sounds like your child, and friends or relatives insist on buying them something for Christmas, why not say to give them money?  Whether cash, so they can put it in their money jars or money straight into their bank account.  While this may feel a little uncomfortable, most time the giver will be pleased it is going towards something they really want or something useful rather than something frivolous.

Your child can then determine if they want to spend or save the money received. Ideally, they should spend some and save the rest so they can purchase something of higher value in the future.

Whether you a shopping for gifts before Christmas or shopping in the sales after Christmas, planning ahead and searching for the right price can save lots of money this Christmas.

Many shops have sales prior to Christmas. Sometimes they are on only for one day or only on selected items so knowing what you want is important.  Firstly, write a list of everyone you need to buy presents for and the types of things you want to buy them plus the total amount you want to spend.  

Then start searching online for the things that might be suitable.  Finding the right model, colour etc and knowing what the prices range from prior to buying them is really useful in knowing if you are getting a bargain.  Then, wait for the right time. Starting Christmas shopping about 3-4 weeks in advance is worth doing to make some great savings.

Equally, buy gifts for the following year or Christmas decorations in the sales after Christmas.  This will save you money for next year.

Do your children appeal to you for expensive holiday activities that stretch your budget too far? 

Of course, you don’t want your child to be bored during holiday periods. You want them to enjoy their school holiday, but at the same time, you don’t want their holiday activities to break the bank.

You probably already know the kinds of activities that they like, but just to be sure, sit down with them to discuss how to approach the coming holidays. Find out what they’d like to do, and see if you can work around that.
 
This process will likely take several meetings. In your first discussion, explain to your child how much you’re able to budget for holiday activities, and ask them to make a list before your next meeting. Make it clear that the list should include activities that they would like but that fall within the budget limitations.

Hopefully, you can end up with a list of activities that your child will enjoy and benefit from but that will fit within your budget. To motivate them to choose wisely, you could promise that any money from your proposed budget that is not used will be put into savings for them.

You can prepare a list in advance and give it to your child to serve as a jumping off point. Below are some possibilities for your list.

Your teen’s first job might be bagging groceries at your local supermarket, or it might be life-guarding at the local swimming pool. It doesn’t matter what his first job turns out to be, there are certain things that he should know before working at his first job.

Savings Account
Your teen probably already has a bank account. If he doesn’t, help him to open a savings account and to develop a budget that will include regular deposits into that savings account.

If his budget doesn’t include regular savings deposits every single pay day, he might give into temptation to purchase all the goodies that he never had enough money for in the past. This point in his life could pave the way for continued good money managing or it could erode his previous good financial habits if he doesn’t proceed carefully.

Tax Information
Your teenager probably will already have a rudimentary knowledge about tax before he gets his first job. He will have overheard you talking, or perhaps complaining, about how your income is taxed.
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He will probably not actually understand the tax system, and you will need to explain to him how he will be taxed. The first thing to do is to help him get a Tax File Number, which he’ll need when he fills out the tax form on his first day at work.

Explain to him that if he expects to earn less than $18,200 in a year, he will not have to pay tax and should claim the tax-free option on the tax declaration form at work. Otherwise, his employer will have to withhold up to 50% of his income in tax.

If he works for more than one employer, then he should claim the tax-free threshold at the job that earns him more.

Teach Him About Superannuation
Even though he’s a teen, he needs to learn about superannuation. If he is under 18, works 30 hours a week, and earns over $450 gross in a month, he is eligible to have his employer make superannuation contributions.

Go over the different kinds of superannuation accounts so that he picks the one that is right for him at this point in his life and, hopefully, in the future as well.

Daily Spending Habits
Without being overbearing, talk to your teen about his daily spending habits and encourage him to continue the good financial habits that you instilled in him as he was growing up. Remind him to track his budget continuously and keep on top of his daily spending so that it doesn’t invalidate the budget that he put together so carefully.
 
 

Learning how to budget as an adult is more difficult, so start your child out right by teaching him how to budget while he is young, and you will build good money budgeting habits right from the start.

These lessons are not necessarily easy for either the parents or the child, but when your child reaches adulthood and finds that he is able to manage his money better than his friends, he’ll have you to thank. He might not recognise that his proficiency with money is due to the lessons you gave him early in life, but you will have the satisfaction of knowing.

Include Your Child in Discussions about Your Finances
Lots of parents think that they should never discuss their financial situation with their child. The opposite is actually true. Bringing your kid into the family’s financial discussions will help to give him the context he needs to understand why certain purchases are not made or why holidays are not as elaborate as their friends’ trips.

You will need to determine what level of inclusion is appropriate for your child, but getting him involved even a little when he is young and then increasing his involvement step by step as he matures will give him the working knowledge he’ll need later in life when dealing with his own finances.

A Weekly Allowance Is a Good Teaching Tool
Some parents give a weekly allowance and some don’t. Sometimes the allowance is tied to household chores. Sometimes it’s not tied to chores but is considered a way of teaching kids to budget.

Keep in mind the value of giving an allowance as a method of budgeting for kids.

• A regular allowance gives your kid the opportunity to learn budgeting while using his own money.
• Because he knows how much he’ll be getting each week, he can plan a budget that includes long-term savings, savings for coming purchases, and daily spending.
• He can track his budget from week to week and learn the consequences if he veers from it.

Simple Is Best for Small Children
Keep budgeting very simple when your child is quite young. The idea is to begin teaching the concepts of saving money for the future and prioritising how to spend it.

Many parents like to use clear glass jars for young children to put money into.

• The spending jar is for money that the child can spend at will.
• The sharing jar is for money the child can donate to a cause he chooses.
• The saving jar is for short-term savings – for a toy that cost more than one allowance.
• The investing jar is for long-term savings – for larger items that take time to save for. You can even introduce the idea of earning interest on the money in this jar.

Get More Complex as Kids Get Older
As your child grows, you will find that including him more and more in financial decisions will deepen his learning about budgeting. Watch your child’s attitude toward money to determine how fast to bring him along.
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You’ll find that teaching simple budgeting at an early age and then progressing step by step so that he can participate in decisions on bigger purchases will prepare him well for dealing with his own money as an adult.

We are all busy and there is always so much to be on top of, school lunches, homework, after school activities, work, dinner etc.  Sometimes teaching your child about money is the last thing on your mind.  However, as you know kids learn from their parents and whether you are intentionally teaching them or not just observing how you behave, say and react gives them a sense of what to do.  Kids learn more from you then from their teachers and friends combined.

If you don’t take the time to teach your kid about money, they may learn from negative or outside sources, such as a friends, television or other family members who aren’t financially savvy. If you are already teaching your kids about money, this is fantastic and you are setting your child up for financial success in the future. Even if you are already teaching your kids or you are planning to, here are some of the not so good ways to teach kids about money that you may want to be mindful of.
 
1.Waiting Too Long to Talk to Your Kids About Money
Kids understand more than you think.  Starting at age 3 isn’t too early and you can start with simple concepts like what is money, how money is used to buy things from the shops. Playing simple shopping games at home is great fun as well.  See What to Teach Kids When.
 
2. Not Talking to Kids at all About Money or Leaving it to Someone Else to be Their Teacher
Some parents find talking about money to their kids taboo or not something that they should be sharing.  Curiosity about money should be encouraged.  Obviously, it is up to you what you want to share, especially if asked how much money you have or how much you earn, but these questions shouldn’t be shut down either.  These are great segways into explaining how money is earnt from working, how value is placed differently on different skills and jobs and how saving and investing money impacts what you have.

Some schools and teachers teach about money or financial literacy in some form.  However, it shouldn’t be the job of teachers to instil good money habits.  Always encourage your child to learn about money at school but ensure you are also giving them a good education on the topic at home.
 
3. Lying to them About Money
Especially when kids are young you may think they won’t understand or don’t need to know.  Children understand more than you think and making a habit of lying to them breeds mistrust in what you say or potentially stops them asking questions in the future.  Easy traps to fall into is to say you don’t have money when they want a toy or a sweet but then you go and buy the groceries.  It’s easy to say money grows on trees when you can simply explain how money is earned.  We all do it but just be mindful that the truth and even a simple truth goes a long way to starting a child on the financial savviness journey.
 
4. Not Showing Them How to Manage Money or Bank Accounts
As your child gets a little older and they have a bank account.  Show them how to use it.  Gone are the days of visiting a banker at the local branch but simply showing them how to access their account online and showing them what everything means is a great first step.

Next, explain to them about money going in and money going out.  Show them actual transactions of when they put money into the account and when money was taken out plus of course the remaining balance.  If the account charges fees, explain to them what they are too.  However, many bank accounts these days don’t have fees so it is worth hunting around if your account charges them.
 
5. Uncontrolled Spending
Kids learn from what we do and they use us as their role models.  If we spend money without a thought then are stressed when bills come in or when something unexpected happens, this sets an example on how to manage money.  Even just the view that you go to school, then university, then get a good job so you pay for a nice house and car needs to be challenged in today’s uncertain world.  With more and more technology, different skillsets becoming less in demand and others increasing, companies choosing staff reduction as short-term cost savings, being in a good financial position to weather whatever life throws at you is good practice to have.

Teaching kids how to save and to have a savings buffer for those unexpected events is important.  To think about what they spend their money on, not saying you can’t have fun and buy what you enjoy but put it in context of your financial situation.  Showing how to manage and track their money through online banking or specific finance apps is also good practice.

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Here at Money Moppets, our passion is to help parents teach their kids about money so that they can be confident with money as they develop into adults.  For those parents who are confident with money many see the value of teaching their kids and may just need a little help on how to approach it. Those that aren't confident may feel a little daunted.  If this is you don't worry, we are here to help and if you have any specific questions, comment on this blog post and we will do our best to give you some helpful tips.

One way to test your confidence is by how you approach saving money. Most of us know that saving money is an important part of life if you want to have a comfortable living. Whether you want a car, a house, a holiday, or the latest toy, saving up is key. It is not surprising that many people struggle with saving and end up giving up without reaching their goals.  However, there are some that nail it. So, are you a confident money saver?  Test yourself by reading below the 5 common habits confident money savers exercise.
 
1. Know What You a Saving For?
 
“A goal without a plan is just a wish”.  This saying couldn't be truer when it comes to saving money! The first step to success is to identify what you’re saving for. Is it a trip to Paris? A deposit on a house? Money for your child's education? Knowing what it is you want and having a clear goal will help you to stay on track. Have a picture of your goal front and centre so you will see it everyday to give you that extra motivation. Without an end goal in mind, it’s easier to stray from the saving path and spend money impulsively because – why not?
 
2. Know When You Need It By?
 
Now that you know what you are saving for, it's time to determine how long you have to save it.  This time period could be set for you like when your child reaches school age or a timeframe you create yourself. If you are choosing the timeframe yourself, set a realistic but also a challenging goal. If you give yourself too much time, there won’t be enough pressure to motivate you and you will be less likely to stick to your plan. If you don't give yourself enough time, the goal seems unattainable and you will likely give up.
 
3. Have a Savings Plan
 
Once you know your savings goal and your timeframe, take a good look at your financial situation and how you've been spending and saving your money. Determine how you can improve your budget, where you can save money or get a better deal, where you can cut back and what ‘needs’ are you spending money on that are really just ‘wants’. Saving money can mean big changes, like moving house or getting a new job.  In most cases though it means small adjustments to your lifestyle like bringing your lunch from home rather than buying it at work. You might also want to think about how your savings can work harder for you, either in the form of a high interest savings account or investing in shares. All successful savers work out a plan to reach their savings goal, and stick to it.
 
4. Tell Others Your Plan
 
Your family and friends can be a great support in helping you achieve your savings goals. It’s psychologically proven that sharing your goals helps you to attain them, by adding the pressure of making yourself accountable to your peers. You can make your goals feel more 'real' by sharing them. Your social group can cheer you on, offer advice and show their disappointment when you’re falling behind. 
 
5. Review Your Progress - Regularly! 
 
Set regular milestones along your savings timeline, either weekly or monthly, and focus on reaching those goals. If those milestones are big achievements, think of doing something to reward yourself. Keep track of the goals you have reached and how you are progressing. Many banks have savings tools and calculators specifically for this purpose.
 
So how did you go?  Do you practice these habits?