Children and Finance It’s never to early to start.

Children see money nearly every day, and as they become old enough to recognise the currency value on coins and notes they’ll want to start counting – be mindful that very small children and coins don’t mix well.

If you decide to give children pocket money or to pay them for doing age-appropriate chores, encourage them to save with the gift of a money-box. Get yourself a money-box as well and each time your child puts money away, do so yourself – and vice-versa. It could be fun!

As they get older, take your children to open a bank account. Explain how interest works and talk about their savings goals. If, for example, they want to buy a new bike, discuss how much it will cost and how much they will need to save each week.

When your child is old enough, introduce them to their bank statement and point out any fees and charges. Children often assume that ATMs supply unlimited cash. When making a withdrawal, show them the receipt and explain how the balance has reduced.

Most kids today have mobile phones. This is a great opportunity to teach them about meeting financial obligations. Show them how to put aside money for bills, then allocating the remainder for savings and spending.

As children enter their teens, many get part-time jobs. If you believe they are handling their money responsibly you might consider a pre-paid “credit” card. Australia Post offers a Load & Go Visa card which works as a credit card but uses the owner’s money instead of credit.

Learning early that plastic money is not limitless can avoid a lot of grief later in life. The Australian Securities and Investments Commission (ASIC) reports that the average Australian credit card holder owes $4,400 per card, on which they pay around $600 interest each year!

However, not all debt is bad; few people buy a home without a mortgage. Your child’s first debt will likely be a car. It’s tempting to help financially but you’ll probably do them a greater service by encouraging them to borrow. Not only will they earn their own credit history, they will understand the importance of borrowing, interest and affordability.

If you decide to lend them money, draw up a repayment schedule and be strict.

Teaching your kids good money habits early is a lasting gift. And as the line goes - if you ever think no-one cares about you, try missing a mortgage payment!

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