How to set your children on the path to financial security

It’s a good idea to help your children learn how to manage their finances when they’re young.

The sooner they start to manage money, the more experience they’ll have. And this experience can help them become better money managers and financially secure.

Here are two ways you can help your children practise money management:

1. Teach your children to budget and manage their money

You can start by explaining your household budget to your child, so they learn about the different types of spending. For example, they could learn about:

●      Expenses like insurance

●      Expenses that secure their home, like rent or mortgage repayments

●      Expenses that ensure the family’s financial security, like savings, investments and superannuation

●      Discretionary expenses, like clothing

You can also help your children create budgets for their pocket money. They can decide how much to allocate to their financial security and how much they can spend. An easy way to do this is to download an app or use a spreadsheet template. Once a week, they can record what they’ve spent and compare it to their budgets.

FLX is a great way to help with budgets. When your child buys something with their FLX prepaid Mastercard, it’s automatically recorded in their FLX App. So they’ll have a record of everything they bought to fill in on the budget.

2. Teach your children about savings and investments

There are three ways you can teach your children about savings and investments.

First, you can show them how paying off an extra amount on a home loan can save a substantial amount of interest.

Second, you can explain how savings accounts work and how to save for a long-term goal. You could also open a savings account for your children and pay a portion of their pocket money into that account. You can also encourage them to contribute, especially if they get extra money from a part-time job or as a birthday gift.

To incentivise your child to save, you could set a long-term goal, like saving for a car purchase or property deposit.

You can also teach your children to save with the FLX App. Your child can set a savings goal and transfer money into that goal. Once the goal is reached, the money may be spent.

Third, you can teach your children about investments. If you invest in shares or crypto you can show them your investment statistics.

Another fun way to help them learn about investing is to create paper investments – they choose shares or cryptocurrencies and track them, but only on paper. As they watch their chosen asset values change, they will learn how:

●      Some assets are riskier than others

●      You can lose everything with the wrong investment

●      There are advantages to diversifying a portfolio

●      Capital growth can help you build future wealth and financial security

You could make a game of it – everyone in the family can choose shares or crypto assets. After 12 months, the one who made the most (paper) money gets a prize.

Let your children learn to save and manage their money with FLX. It’s linked to your Flexischools account – so you can track what they’re spending their money on. Learn more about FLX here.

This is general advice. Read the PDSs & TMDs at before deciding if FLX is right for you. The FLX Services & Flexischools are provided by InLoop Pty Ltd ABN 27 114 508 771 AFSL 471558 (trading as Flexischools). The FLX Prepaid Mastercard is issued by EML Payment Solutions Limited ABN 30 131 436 532 AFSL 404131 pursuant to license by Mastercard Asia/Pacific Pte. Ltd.


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