Despite what some children may think, money doesn’t come from a hole in the wall or from the supermarket. It’s real, it has to be earned, it pays for the roof over your head, food and clothing – and, if you’re lucky, there’s some left over to put towards savings.
The quickest way to teach kids the value of money is to give them regular pocket money and help them open a junior banking account. Teaching them banking language is important – deposit, savings, balance, withdrawal, interest – the terminology and meaning are often a whole new world to them.
Having the appropriate banking account also underpins a child’s budgeting skills whereby pocket money can be allocated towards different goals. The eventual purchase of these goals, be it a toy or game etc, acts as a great incentive for the child to keep going. Giving kids the power to control their spending and track money going in and out of their account will help build healthy financial habits. It also more clearly illustrates the different between ‘want’ and ‘need’.
The social aspect of junior banking can’t be underestimated either. Taking your child into the bank with you to learn the deposit or withdrawal process using a teller helps make the experience ‘real’. The same can be said of school banking where saving is a social activity that the whole class takes part in on a particular day every week.