Teaching your kids to spend wisely
Learning to earn and save is important for your kids, but knowing how to spend wisely is another important financial skill for them to learn.
As your kids head into school holidays the increased independence and desire for spending pocket money will inevitably increase. And not just on chocolate eggs and hot cross buns! A FLX® prepaid debit card and savings app can help with how you teach your kids to earn money but also monitor how they spend it.
Once your child has decided to spend their money on something they really want, it is not the end of the story when it comes to financial education.
As a parent with a life of experience, you know that many of the things you buy can be bought at different prices. But your child needs to learn this through their own experience.
Of course, you don’t have to teach your kids all these concepts all at once, but hopefully they will pick them up over time and become smart spending adults.
Introducing the supermarket pricing challenge – a fun game to play with young kids
Here’s an easy way to help kids get on the right path from an early age… Ask your child to find a standard item – something easy, such as a packet of sugar. Ask them to see if they can find you the cheapest option.
Younger kids can work on costs per pack (I found the cheapest one, mum). Older kids can be challenged to find the cheapest option per kilo.
Another easy way to help teach kids is to show them how a simple online search can often show them that an identical same item is often available at vastly different prices.
Here are a few more things you might want to help your kids understand when they are in spend mode:
Watch Out For Emotional Spending
We now know that emotions run the show when it comes to people deciding to buy things. All the financially rational decisions people make are always in the context of their emotional state. This is as true for kids and teens as it is for adults. Obviously spending a couple of dollars to cheer up after an accident might be a good idea, but it might not be a great idea for your child to be online making purchases after a big fight with her older sibling!
Check Our Product Features and Benefits
It is always worth helping kids understand the different features included in a purchase, and what that might mean. If a basketball has a heavy-duty surface, we might expect it to survive for longer on an outdoor asphalt court.
Are There Any Category Equivalents?
Are there any equivalents to the product he or she has in mind? Perhaps she has her mind on a Nike ball? There are often other brands also worth considering – such as Adidas or Spalding. It is a great habit for kids to understand that most purchases have other options beyond their first thought. It’s not necessarily good to make every single purchase.
Quality Levels & Warranty
Does she want a basketball to last forever or is it quite likely the ball will go missing soon? Does it need to be a competition standard and weight, or is it just for backyard practice? A big thing to consider is whether a particular item has a warranty included, and if this is a good length compared to other options?
Are There Any Specials or Promotions?
For the brands and products she is interested in, are there any options on special or promotion. Many kids don’t realise yet how retailers compete with each other. They think that prices are the same wherever they go. Sometimes, of course, they’re right. However in many categories retailers are in fierce competition and a simple search can save a lot of money. A lifetime of looking for a deal can add up to a lot of additional financial security for your kids.
Is Postage Extra?
A big trap for online purchases, it is often worth prompting your child to checking if postage is included, or if it will be added later. This can undo a lot of the benefit of finding a special!
Now obviously the ages of kids will determine when you raise these issues, but don’t forget that as a parent or guardian, your child also looks to you to see how YOU handle money.
Lead by example
One of the most powerful things you can do may simply be to model good spending yourself. If you talk to your child and show them how you make smart spending decisions for your family, there’s a good chance these good behaviours will stick.
Reviewing Spend
It is a good habit to understand how spending adds up over time. Kids who are FLX app users can do this at the touch of a button and parents can see the purchase your child is making from your existing Flexischools app and give them feedback if you think they could spend more wisely.
FLX is available now in your Flexischools account, so if you think it might be a good tool for you to help educate your child about money, and learn to save, why not have a look?
This is general advice. Read the PDSs & TMDs at www.flexischools.com.au/legal 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.