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Part of being a parent is teaching your children the essential skills they'll need to live a happy, fulfilling life. While it may not be the most exciting topic for kids, financial responsibility is a critical element of this, and it's vital to make sure they understand how banking works, and what they can do to spend and save their money responsibly.
Even so, it's not always easy to work out what parts of money management are the most important. To help you out, the team here at Beyond Bank has put together a quick guide to a few of the most important areas to cover.
The importance of patience.
For younger children, it can be difficult to explain how interest works, or the intricacies of credit cards. However, that doesn't mean you can't start promoting financial responsibility, with one of the easiest and most important concepts to grasp being the importance of patience. This could be as simple as telling your kids that they need to wait before you'll buy them a certain item, in order to underline the point that money is a finite resource, and needs to be saved up before it can be spent.
Patience ties in perfectly with saving money and a great way to make this point is by telling your kids that the longer they wait, the better an eventual purchase will be. This could be through saving up pocket money to buy a certain toy, or simply teaching your child that going to the shops doesn't necessarily mean that you'll be buying them something.
Start saving early.
Once your kids get a little bit older, it's a good idea to set them up with their own bank account, such as the Beyond Bank BU Savings Account. This is perfect for children aged 18 or under and offers a great way for them to start saving and earning interest. Not only will an account like this help your kids grow their balance, but it's also a great way to reinforce the value of patience and illustrate how interest works in practice.
Just as importantly, the Beyond Bank BU Savings Account has no account keeping fees, meaning your kids will be able to grow their savings without worrying about their hard-earned pocket money going towards unnecessary account-keeping costs.
Difference between debit and credit cards.
Finally, one of the most important lessons to teach your children about money is the difference between credit and debit cards, as well as how to use credit in the right way. One of the most common financial issues that we see in Australia is people spending more on their credit card than they can afford to pay off, which leads to growing debt due to accruing interest.
When they're old enough, get a debit card that links to your child's bank account, and teach them how to monitor their balance through online banking or a mobile app. This will help them understand how the money they spend impacts their total savings, and the value of only spending what they can afford to.
With all of these lessons, it's important to get your children used to the banking process and understanding who they can talk to when they need financial advice. That could be as simple as bringing them to the bank with you or enrolling them in a financial education program like Beyond Money.
Regardless of the methods you use to teach your children about saving and spending, the team at Beyond Bank is available to help out with the right accounts. To find out more, get in touch today.
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This information has been provided without taking into account any of your objectives, financial situation or needs. You should consider whether it is suitable for your circumstances before acquiring this product.
All loans are provided by Beyond Bank Australia Ltd ABN 15 087 651 143 AFSL/Australian Credit Licence 237856. © 2023.
