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Article image for So you’ve opened a children’s savings account … Congrats!

Posted by Rhianan Strangways

Date posted:

Now what?

When you were growing up, you undoubtedly got your hands on tangible cash pretty often.

In an increasingly cashless society, it’s easy to forget that children haven’t - and probably won’t.

Children may miss out on learning the shape, size and texture of real money. Teaching them about money is fundamental to them becoming financially successful. Below are some practical ways you can assist your child to learn the value of money.

What does money look like?

An easy way for children to recognise cash is through play. For younger children introduce coins through pencil rubbings (place a coin on a flat surface, lay a sheet of clean paper over the coin and gently scribble a lead pencil over the paper and coin to reveal the coin face image - see image).

Allow children to handle dollar notes, look at and discuss the details on each side – the people and places, the colours, the plants and animals. Especially now that new notes are coming into circulation.

What value does money have?

Talk about the face value of a coin or note. The biggest coin doesn’t necessarily equal the greatest value. Discuss the difference between silver cents, gold dollars and dollar notes. If you have the coins at home, show them how many five cent pieces it takes to make one dollar. Compare that with the number of five cent pieces for the 50 cent piece.

How can they get money?

Consider setting up an allowance where children have the opportunity to earn money through chores around the home. Choose jobs and the value of those jobs that are appropriate to the child’s age. As a suggestion, paid jobs could be tasks that a parent would otherwise have to do, like sorting washing, packing the dishwasher, mowing the lawn or vacuuming the floors. Older children may have the opportunity to earn an allowance through assisting neighbours or relatives with their car washing, gardening or by tutoring younger children.

If you, like a lot of people, don’t regularly have cash available to give to children after they have completed their chores, consider pledging to transfer a deposit to their savings account electronically. (Or make the transfers onscreen in front of your children.) Then show your child the transaction in their own account through internet banking (or via their passbook), so they can see they’ve made progress.

How do you get money?

Some children believe that money comes from a machine in a wall or is given to parents, like a gift, by shop assistants. Take the time to explain to your child where your money actually comes from. Explain how it gets into a bank and why you put it there.

If you are saving for a particular goal, explain how you are making savings in your adult life and how you will feel when you reach your savings goal.

What can I spend money on?

Introduce children to budgeting by having them help you with grocery shopping. This could be in store or online. Guide them through choosing products that are full price vs on sale. Demonstrate the price per kilo and how it increases for larger quantities of an item. Allow your child to experience paying for goods by letting them hand over the cash at the register and be given change in return.

If your child has a goal in mind, help them set up a budget, explaining that for X number of jobs they’ll have enough money for the desired item. This might take X weeks, but saving and working for an item is important.

How can money help others?

Consider teaching children to think about the three Ss every time they get some money. Saving for that special item or goal. Spending for day to day things. Sharing for helping others.

Learning the joy of giving to another person could start small by buying a gift for a loved one and experiencing the delight it brings them. To expand on that joy, children could save a percentage of their allowance to give to someone they know is in need or to a charity. The aim is that children will feel the satisfaction of working hard to bring joy to others.

Good luck!

Teaching your child to save from an early age may feel like a thankless task, but you’ll be setting up a strong foundation for your child to become financially literate.

LLL Savings Account

If you want to open a savings account for your child and haven’t yet, consider an LLL Children’s Savings Account. With no fees or charges, at all, and a great interest rate, the LLL has been a trusted savings account provider for Australians for nearly 100 years.

This advice is general in nature and does not take into account your personal situation, needs or objectives. You should consider if this product is right for you.

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