New year, new start …

Start of the new school year, the new calendar year….new beginnings.

It’s a time when we focus on our families and plan the year ahead. It’s a good time to review how the household will run and how money will be spent.




When my children were young we had family money rules:

  1. No credit for kids
  2. Avoid impulse spending
  3. Research your options before you spend
  4. Never spend all the money you have – always keep some savings in your account….just in case
  5. Purchase with cash rather than electronically until you understand money value

It was my way of slowing down their impulsive spending and helping them to understand the value of money.

I remember my son wanting to buy a device – Nintendo from memory. He had saved money from chores, birthday and allowance and had $100 to spend (rule number 1). He had been online and identified the cheapest option (rule number 3) and eventually (rule number 2) we went to the mall to buy. After checking out the options and looking at the one he wanted, we made our way to the bank to withdraw the cash (rule number 5). He was thrilled when the bank officer gave him his $100 note. Back in the store, he was about to make the purchase when he stopped and said “I really want the Nintendo Mum, but I really want to keep the $100 more, so let’s go home.” He kept that $100 note in his wallet for the next 3 months, and enjoyed looking at it regularly. Eventually he said “I’m ready to buy the Nintendo now”…….and he did, thoroughly enjoying it.

The experience reminded me how important it is to guide our children as they learn to make purchases. I was surprised at the impact the cash had on his purchasing decision, and despite the time it sometimes took to put these rules into action, he has become good at making spending decisions.

Teaching children about money is as much a parenting issue as it is a financial one. Like many parenting decisions we are influenced by our own upbringing, our values and our circumstances.

So, as you get the family organised for the year, take some time to review how you manage pocket money in your house:

  • What are your family money values? – Many parents like their children to learn to save, to spend and to give away. Is there a charity or cause you would like them to contribute to?
  • Is pocket money paid for chores, or paid as an allowance? – What you choose to do is personal to you and your family, remember it has to be practical. Some families prefer to pay for chores, while others expect chores to be done regardless of payment. You decide what’s best for you.
  • Is it to cover specific expenses, like lunches or outings, or can the children choose how to spend it? What you decide will depend on the age of your children and how much money you decide to pay them.
  • Do you pay in cash, into a bank account, or do you keep track of it in a ledger? While electronic payments are very convenient, children under the age of around 12 years won’t usually be given an eft-pos card by the bank. One option is to keep a notebook record of their spending and pay from your funds. However, don’t underestimate the power of using cash to teach them about the value of money while they are young.
  • Visit the bank Talk to them about children’s bank accounts. Make sure you have the best account for a child (there should be less fees than an adult’s account), that you have the most appropriate signing authority on the account, and if it’s appropriate get an eft-pos card.

It’s worth taking time to think about how you want to teach them about money if you want your children to grow up with a good financial understanding.

Today’s blog was written by guest blogger Stephanie Young. Stephanie has over 25 years experience in the banking industry,  specialising in financial education. She is also a facilitator with the Commission for Financial Capability and is passionate about teaching kids how to manage money. 

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