Takeaways from the Savvy 2020 Parents’ Financial Literacy Survey
Many parents consider it the “other” difficult talk with their kids – finance and money. What are some of the takeaways from the Savvy 2020 Parent’s Financial Literacy Survey, and what can parents do to instil good financial habits in their children from a young age?
32% of parents have never discussed superannuation with their children
There will be a rude awakening for these children when they see some of their first pay being diverted toward superannuation and not knowing why. Superannuation and investing for the future should be discussed as young as possible – seeing a financial adviser may help, as it allows you to get a grasp on financial literacy and in the years to come, the adviser may be able to assist your children with discount or even free advice.
30% have discussed good and bad financial habits with kids
Discussing good and bad financial habits with kids is a must, especially when they start saving for major assets such as cars or homes. One tip is to use games. Monopoly is a tried-and-true example – concepts of asset ownership, paying rent, and asset finance – such as when they need to mortgage properties – are all included as base gameplay. Video games use in-world currencies that require players to “grind” or complete repetitive and/or specific tasks to level up and unlock special items.
You can teach them about personal loans by lending them money to buy “epic” items but having to do chores to pay off the debt – with interest.
Most parents have never discussed entrepreneurship and business management
If your child has moved passed the “firefighter” or “astronaut” phase of future jobs (though those are two fine professions) ask them if they have wondered about going into business for themselves. Easy entrepreneurship lessons for kids can take place in the school. They could sell cakes or cookies for example. (Remember to deduct the cost of materials after the fact!) You can also set prices for chores around the house – the more chores they complete, the more money they make. When they’re ready, they can advertise around the neighbourhood to help others do their chores.
61.5% of children have a savings account
For most of us growing up with primary school bank accounts, we rarely saw how much money was in our accounts until it was “bankbook day.” Now most school age kids have internet access and smartphones – these too can be used to teach kids financial literacy.
For primary aged kids, you can help them with managing their pocket money using apps and debit cards with apps like Rooster Money and Spriggy.
Over half think the school should teach kids about finance and economics
Though there is a school curriculum around finance and economics in Australia, it depends on the teachers and faculty to promote learning – although parents such as you can push for it too. Most learning about finance and economics has to be in the home – using textbooks, videos, games, and other activities. Ask your financial adviser if they have materials suitable for children to learn about finances.