Warning: Financial illiteracy on the rise. Parents urged to teach kids about money

Empowering the Next Generation: Julian Finch's Insightful Strategies for Teaching Financial Literacy to Kids in a Digital Age

With fewer people using physical cash these days, it is more challenging than ever to teach kids about the importance of saving when they can't actually hold the money in their hand. According to Julian Finch, finance expert and founder of respected lending firm, Finch Financial Services, the key is to start early and use both physical and digital modes to teach kids the importance of saving.

"Many people think that you shouldn't talk about money at home, especially around children, but I think this is the wrong approach. The more you talk about money and money management, the more children learn," Finch said.

He has provided tips to help parents teach their kids about money and how to save.

Start young

"Research shows that children who grow up in homes where there are conversations about money are more likely to understand the basic fundamentals of good money management including interest rates and compounding," Finch said.

"Set up a piggy bank with your child and show them how to add money to the piggy bank. Once it is full, take them to the bank and open up an account so they can see the money being deposited into the bank.

"Show them how to check the funds on a regular basis so they can see their money in action. Continue to make payments to them directly into their account rather than the piggy bank. They will see the account rising over time."

Establish an earning program

"Being able to manage money well involves understanding how hard it is to earn. Establish an earning program with your child so they appreciate how to make money," Finch said.

"Create a job schedule and apply rates to the jobs so they know how much they will get paid if a job s undertaken. Check that jobs have been undertaken as required. If work needs to be corrected give them the option of redoing the work or reducing the payment. This teaches children the value of earning and also paying for things."

Comparison values

"Teaching your child the value of items and how many of those items they can afford to buy with their funds is an important lesson," Finch said.

"This teaches kids to recognise the power of their savings and why they need to keep saving if they want to buy certain things. It also emphasises the process of consideration. This means the child learns very quickly whether or not they will use their limited resources to buy certain things."

Create a savings goal

"Creating a savings goal is also critical. Identify something they would like to buy. Help them identify how much it will cost and show them that it may be possible to purchase the item cheaper from a different supplier," Finch said.

"This will not only bring their savings goal into focus, but it will also help them to understand how the real marketplace works."

Teach expenses

"Take your child shopping with you. Grocery shopping is always a good learning activity for kids. If they want to add something to the shopping trolley discuss the impact on your shopping bill," Finch said.

"Ask them if they would like to pay for the item out of their account. I bet they say no. Teaching children about money involves a bit of tough love. If kids know they will always get things for free from mum and dad, this lessens the value of money for them."

Explain costs

"Grocery shopping is also a good way to explain the reality of costs to a child. Products contain labels that explain the unit price of items," Finch said.

"When shopping, ask your child to calculate which packet of chips contains more chips for the price. It sounds like a simple task, but it is also a very beneficial one. It helps to showcase the power of money and how much further it can go if you are diligent in fully understanding costs."

About Finch Financial Services

Based in Hurtsville, NSW, Finch Financial Services has been servicing Australian families and businesses with home, personal and commercial loans as well as asset finance services since 2015.

Ranked amongst the top five percent of brokerages in Australia according to data from the MFAA, Finch Financial Services is a leading brokerage and family owned business that specialises in finding their customers loans that are tailored to their needs and goals.

https://finchfinancial.com.au