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Kiddy banking: as easy as save, spend, give

The behaviours which underline financial wellbeing are formed in childhood and, as adults, we have to work hard to unwind established patterns.

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This often leaves people reflecting on both their own childhood and what they can do to help their children be better.

"I can’t count on genetics and hope they have his savings streak along with his blue eyes.”

I recently overheard my 7 year old son Eli tell his younger brother to cheer up as they packed up their toys last week. I couldn’t help but smile as he added “nobody gets paid to do a job if they have a bad attitude”.

Financial wellbeing was not a hallmark of my teenage years; however, my parents taught me the discipline of hard work - it was expected of me at all times.

From a young age, I saw a direct connection between work and money both at school and in the many small businesses my father ran. But I must confess I am a spender who hates delayed gratification.

From the age of 18, I was forced to be financially independent, with little to spare as I worked full-time and put myself through a university degree.

Future generations

However, like most parents, I want more for my children. But I’d prefer them to be like their father - his working-class family know the per kilogram price of everything on the dinner plate.

If they are to develop that attitude, the research is clear: I can’t count on genetics and just hope they have his savings streak along with his blue eyes.

With this in mind, I have developed a system which - I hope - will help my children entrench the behaviours that go with being good savers.

The system we have implemented is a common one you see in many places and it works for us.

One, two, three

My boys earn pocket money by completing a prescribed list of jobs – from doing the dishes to cleaning to packing up the toy box. The jobs are negotiated and tracked on a chores board.

They can only earn a maximum dollar amount to the equivalent of their age and if they’re short on jobs, they don’t get all of their pocket money. Eli has been known to make everyone’s bed on pocket money day if he is on track to earn less.

Moreover, we only pay money for a job done with a good attitude - a tip I picked up from another Mum. 

Save, spend, give

On Sunday nights, my son is paid his ‘salary’ and we divide it into 3 jars – save, spend and give.

There is a ritual to this conversation – the first thing he does is save 50 per cent of his salary. We talk about savings only being touched in emergencies and what constitutes an emergency such as a leaking roof or an unexpected car repair.

Secondly, he chooses how to split his money between spend and give. We talk about what he’s collecting his spend money for which creates the opportunity to talk about delayed gratification.

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We encourage him to not spend all of it every week but put it aside instead for something bigger and aspirational.

Lastly, we talk - most times unsuccessfully - about the give jar. I say unsuccessfully because my children have only known financial comfort and it is hard for him to imagine a Christmas morning where Mum and Dad could not afford presents. We think it’s important for him to feel empathy for people who have less than him. 

However, this isn’t just a learning experience for my sons. My husband and I have committed to talking about money in front of our children, something we both find difficult at times.

Professor Elaine Kempson, a leading expert on financial wellbeing, often talks about Australians’ inability to talk about money. The ‘she’ll be right’ attitude all too often holds us back from these conversations.

I used to be against ever talking about money in front of my children - I never wanted them to worry about it because, for me, it was a parent’s responsibility.

I also felt slightly horrified at the thought of my children repeating in the school playground that we can’t buy something because it is too much money or we’re cutting back on something to put money aside for an upcoming holiday.

However, the research is clear: talking about money with your kids and in front of them is an important building block for financial wellbeing.

At the end of the day, if my children grow into good savers, that would be well worth the potential embarrassment at the school gate.

Shannon Peachey is Tribe Lead, Savers and Investors at ANZ

The views and opinions expressed in this communication are those of the author and may not necessarily state or reflect those of ANZ.

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