There’s not much in the way of financial education in school. Unless you go on to do a degree in accountancy, you’ll have to work out how to file a tax return as you go along. It seems that this task is left up to the parents rather than teachers. The good news is that it’s never too soon to start teaching your kids about money so that they can make better financial decisions going forward. Just talk. Don’t bother with the flipcharts and the Q&A, he’s only three! All you need to do is talk about the process of handing over cash or a card in exchange for groceries. Explain that the groceries cost $64 and so you’re handing over $70 and getting $6 back, for example. If you’re using a card, explain in simple terms that the card tells you bank to give the shopkeeper the $64. Bills are another good way to introduce the idea of money. When you get your electricity bill, show your child how much it is and how many work hours it took you to earn the money for it. Talking about money isn’t one big lecture, it’s a series of conversations that will evolve as your children get older. Give your children transparent savings jars. This is a slight change from the old–style piggy bank and it’s for a good reason – so your kids can see the money grow. You should have three jars each – one for saving up, one for spending at the weekend on whatever and one for a favourite charity. This tripartite method teaches children how to wait and plan, how to enjoy spare cash and also how to give some back to the community. Open up a high–interest saver. The earlier you start a saver account for your children, the better – they’ll have more years ahead of them than you for that money to earn interest! It’s a big step in life and the sooner they understand the concept of compound interest, the better. Children’s savers often have attractive interest rates than the ones offered to adults, which seems very unfair indeed, considering you’re probably funding them! However, that saver account is teaching your children an important lesson because they’ll be able to see their money grow month–by–month. Use fake money. InfoChoice does not recommend or endorse forgery! Just have a few rounds of Monopoly or set up a play shop. Set a budget for a week’s shopping and see what you can make with half a wooden avocado and a miniature cereal box. Offer pocket money. This can be a bit of a hot topic, with some parents thinking that the kids will end up refusing to get out of bed for less than $1. Others believe that offering money for chores with the occasional bonus just because is a good way to teach the value of hard graft. It’s up to you, but if you decide to do pocket money, make sure it’s payable only on completion of tasks or they might think they can get money for nothing. Do you actually need it? Or just want it? This is an important distinction. Of course, your child wants that pixelated treasure that keeps popping up for sale in her online game, but it’s $15.99. That $15.99 could go towards the Christmas food budget instead, pay something towards the trainers she’s had her eye on for weeks, or help to pay for the internet connection that allows her to play the game in the first place. Wait a minute… Even some adults struggle with deferring their gratification and it’s not much fun to wait for your newest sparkly. It’s a vital skill, though, because that $15.99 treasure might be reduced to $10.99 next week, or your child might go off the idea entirely and decide to buy a book instead. You don’t always have to buy something for your children every time you step into a shop, either. It’s not all about them – they can wait until the weekend to spend their money. Learning financial patience and using it is a great way to save and control money well into adulthood. Give them a savings goal. Children might struggle with the concept of saving for saving’s sake as it is a bit abstract. Saving for a new game, however, is as real and vital as it gets for many children. If you give your child $10 pocket money a week and they’ve got their heart set on a particular game that costs $40 then you should help them to formulate a plan to save up for it. If they save $5 each week, they can have their hands on their prize in eight weeks – sooner if they wash a couple of cars or mow some lawns. Let them make mistakes while you’re still feeding and housing them. Your child has $35 and is planning to buy The Very Important and Essential New Game next week, when they suddenly decide to splurge $20 on what can only be described as tat. Are you going to give them $20 in recognition of their burgeoning financial acumen? No. That’s another four weeks of savings right there! Hopefully, that will help them to avoid impulse purchases in the future. Offer a good example. Pay your bills on time as much as possible, talk about the budget for holidays, redecoration plans, a new car… Make money something that you discuss rationally and constructively and let the kids watch you use a comparison site to hunt down great utility deals. Avoid impulse purchases yourself unless you can really justify them.