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According to the Reserve Bank of Australia (RBA), the ratio of household savings is falling (although the rate is still significantly higher than it was prior to the Global Financial Crisis). Perhaps, though, our kids could teach us a lesson or two; according to a newly-released survey by Heritage Bank, our kids are earning and saving more than ever.
The Heritage Bank 2015 Australian Pocket Money Survey asked parents from all over Australia to give insight into the pocket money dealings within their families – uncovering some interesting shifts in how pocket money is being managed.
What Information Was Found?
While kids’ pockets are being hit with extra cash, the survey uncovered putting money away for savings is now the number one use for pocket money by Aussie kids – taking over from buying toys and lollies.
The average Aussie child is earning $11.30 per week – although girls are earning less on average ($10.60) than their brothers ($11.80). Canstar caught up with Kathryn Plevey, Heritage Bank Customer Research Analyst, for some more insight into the gender pay gap as well as how parents can encourage good savings habits.
Q: It’s interesting that there is a gender pay gap in pocket money rates – why do you think this is?
A: Do boys drive a harder bargain when it comes to pay and do they need more motivation to complete chores? Or, are parents subconsciously giving more to their boys than their girls when it comes to a regular allowance?
While the gender pay gap seems to mirror the experience felt by many adults in the work place today, it is not clear why the divide is so evident when it comes to pocket money. No matter what the reason for the divide, these results should certainly be of interest to parents and kids who are looking at the way pocket money is handled in their home.
Q: It is indeed great to see that kids are saving more than ever – do you think that learning good savings habits at a young age has lifelong benefit? What are some ways that parents could encourage reluctant savers to save more of their cash?
A: Establishing good spending and saving habits plays an important role in setting up a great foundation for a child’s lifelong relationship with money.
While spending pocket money as it’s received is tempting, it’s important for children to learn about saving their money and thinking about what they will spend it on. One of the best lessons a child can learn is to understand the importance of waiting to purchase an item, rather than buying it on the spot. You can help your child with this lesson by encouraging them to think about a purchase for a couple of weeks before handing over the money and by setting up their very own savings account to keep their money in.
Poor money habits can follow a child into adulthood and can cause problems when it comes to saving for important purchases such as a car or a house deposit. For parents wanting to help their children save try these five tips:
- Open a bank account especially for your child.
- Offer extra pocket money for special jobs.
- Encourage them to save their spare change.
- Reward the child for saving. For example, a special treat when they reach a small goal.
- Match your child’s contributions.
Remember, there’s no better way to help your child learn about money than by setting a good example yourself. Every time you buy an item on a whim or talk about spending or saving money your child will pick up on it.
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